EUROPEAN COMMISSION Strasbourg,13.3.2018 SWD(2018) 68 final COMMISSION STAFF WORKING DOCUMENT



IMPACT ASSESSMENT

Accompanying the document Proposal for a Regulation of the European Parliament and of the Council establishing a European Labour Authority {COM(2018) 131 final}



{SWD(2018) 69 final}





Contents 1. Introduction: Political and legal context 2. Problem definition 2.1 What are the problems? 2.2 What are the problem drivers? 2.3 How will the problem evolve? 2.4 Scope of a European Labour Authority 3. Why should the EU act? 3.1 Legal basis 3.2 Subsidiarity 3.3 Proportionality 4. Objectives: What is to be achieved? 4.1 General objective 4.2 Specific objectives 5. What are the available policy options? 6. Policy Options and their Impacts 6.1. Baseline scenario 6.2 Policy Option 1 (Support option) 6.3 Policy Option 2 (Operational option)

6.4Policy Option 3 (Supervisory option) 6.5. Impacts of the different policy options in relation to tasks 6.6. Comparison of the different Policy Options 7. Delivery Options and their Impacts 7.1 Delivery options 7.2 Impacts of different delivery options 7.4. Comparison of Delivery Options 8. Preferred Policy and Delivery option 8.1 Policy Option 2 (Operational Option), and Delivery Option 2 (New European Labour Authority building on existing EU bodies) 8.2 REFIT (simplification and improved efficiency) 9. How will actual impacts be monitored and evaluated? 9.1. Monitoring 9.2. Evaluation Annex 1: Procedural information Annex 2: Stakeholder consultation Annex 3: Who is affected and how? Annex 4: Analytical methods Annex 5: ELA Problem Tree Annex 6: EU acquis relevant for the initiative Annex 7: EU level committees and structures in the field of labour mobility

Annex 8: Practical Tools for the sharing of administrative documents and information between national Authorities in the field of labour mobility Annex 9: Information tools and problem-solving services for citizens and businesses in the field of labour mobility Annex 10: Overview of policy and delivery options Annex 11: Legal changes to implement the Options Annex 12: Analytical supplement Annex 13: EU decentralised agencies in the area of employment Glossary Term or acronym Meaning or definition AC Administrative Commission for the Coordination of Social Security Systems BusinessEurope European Employers Organisation Cedefop European Centre for the Development of Vocational Training EaSI European Programme for Employment and Social Innovation ECJ European Court of Justice ECPW Expert Committee on the Posting of Workers ECR Euro Control Route EESSI Electronic Exchange of Social Security Information EFBWW European Federation of Building and Woodworkers EGF European Globalisation adjustment Fund ELA European Labour Authority ERRU European Register of Road transport Undertakings EMCO Employment Committee EMU European Monetary Union EPSCO Employment and Social Affairs Council ESDE Employment and Social Developments in Europe ESSN European Social Security Number ETF European Training Foundation ETUC European Trade Union Confederation EU-OSHA European Agency for Safety and Health at Work EURES European network of employment services Eurofound European Foundation for the Improvement of Living and Working Conditions FMW Free Movement of Workers FTE Full time equivalent ILO International Labour Organisation IMI Internal Market Information system INASTI L'Institut national d'assurances sociales pour travailleurs indépendants JIT Joint Investigation Teams MISSOC Mutual Information System on Social Protection ONSS Office National de Sécurité Sociale OPC Open public consultation PES Public employment services QFR Quality Framework for Restructuring SDG Single digital gateway SME Small and medium enterprise UDW Platform European Platform tackling undeclared work UEAPME European Association of Craft, Small and Medium-sized Enterprises YEA Your Europe Advice



1. Introduction: Political and legal context Strengthening fairness of the Internal Market has been one of the priorities of the mandate of the Juncker Commission. On 17 November 2017, the European Parliament, the Council and the Commission jointly proclaimed at the Social Summit in Gothenburg the European Pillar of Social Rights. The Pillar sets out a number of key principles and rights to support fair and well-functioning labour markets and welfare systems. It is designed as a compass for a renewed process of convergence towards better working and living conditions across the Union, ensuring the citizens equal opportunities and access to the labour market, fair working conditions and social protection and inclusion. Ensuring fair labour mobility in Europe is central to this objective. Intra-EU labour mobility benefits individuals, economies and societies as a whole. However, concerns have recently increased over the adequacy of existing rules to uphold fair competition and social standards in the context of stark economic and social differentials. The objective of deepening the Internal Market with a strong accent on social fairness has thus driven forward new EU legislative proposals to support cross-border mobility. These are the revisions of the Posting of Workers Directive and of the Regulations on the Coordination of Social Security systems. These proposals come on top of previous EU legislation to facilitate the free movement of workers and job-seekers and initiatives such as the set-up of a European Platform to tackle undeclared work. Labour mobility has implications for all economic sectors. Yet, enforcing EU labour rules across borders proves particularly difficult in the road transport sector due to the highly mobile nature of operations. This can affect negatively the protection of drivers, while also represent a source of unfair competition between companies. Therefore, the Commission adopted the package "Europe on the Move", including the lex specialis on the posting of workers in international road transport operations which will strengthen social rules in this sector. While the EU legal framework pertaining to EU-level labour mobility keeps evolving to ensure the effectiveness and completeness of the existing acquis, rule enforcement and information challenges remain. On several occasions, the European Parliament has underlined the need to ensure proper implementation of EU legislation on cross-border labour mobility, asking to reinforce controls and coordination between and by Member States so as to promote standardisation and cooperation, including through strengthening information exchanges between labour inspectorates. Moreover, the European Parliament has made a concrete call to coordinate and reinforce cooperation on road transport legislation, including through a possible agency setting. The Council has also stressed the need to improve administrative cooperation and develop assistance and information exchanges in the context of fighting fraud related to the posting of workers, while emphasising the importance of clear and transparent information for service providers and workers. Against this backdrop, in his State of the Union address 2017, President Juncker proposed the establishment of a European Labour Authority (ELA) to ensure that EU rules on labour mobility are enforced in a fair, simple and effective way. This initiative is adopted by the Commission as part of the Social Fairness Package, together with a proposal on Access to Social Protection. It was informed by the results of an open public consultation (OPC) held between November 2017 and January 2018, as well as by various targeted consultations with stakeholders (see Annex 2). The Social Fairness Package will help to deliver on the principles and rights defined in the European Pillar of Social Rights, notably by ensuring that workers' and citizens' rights to equal treatment and opportunities regarding employment and social protection are guaranteed in cross-border situations. As announced, the Authority will be competent to facilitate the implementation of the (i) EU labour mobility rules, which cover the areas of free movement of workers, posting and undeclared work, and this for all economic sectors including road transport. But as mobile workers enjoy both labour and social security rights, the Authority will also be competent for the implementation of (ii) EU social security coordination rules, the two issues being intrinsically connected. Therefore, the initiative will target all categories of persons who are subject to the two aforementioned sets of EU rules - workers, self-employed or simply individuals who are Union citizens or third country nationals legally resident in the Union, as long as they are subject to EU labour mobility and social security coordination rules. This initiative has a self-standing character due to its thematic specialisation and focus on cross-border labour mobility. The proposal has been developed in parallel to an ongoing evaluation of existing decentralised Agencies in the employment field. This Impact Assessment discusses the potential interaction between the present initiative and existing Agencies. 2. Problem definition

Free movement of workers and services is a pillar of the European Union. Mobility enjoys wide support amongst EU citizens and provides the opportunity for workers and companies to seek work and to provide services across the whole of the EU. Around 17 million EU citizens live and/or work in another Member State, of which 11.8 million are mobile workers of working age (i.e. EU-28 citizens who reside in a Member State other than their country of citizenship). Moreover, 1.4 million live in a Member State but work in another (so-called 'cross-border workers') and a further 2.3 million are posted workers, carrying out services in another Member States on a temporary basis (see Annex 12, Table 1). Finally, over 2 million workers in the road transport sector cross intra-EU borders on a daily basis transporting goods or passengers. However, labour mobility remains an untapped resource in Europe. While the number of mobile workers has almost doubled compared to a decade ago, they make up around 4% of the total EU workforce, a lower share than in the United States. Similarly, the potential for cross-border operations of companies is not yet fully exploited, most notably in some sectors such as construction and business services. This untapped potential has strong socio-economic impacts on the job-search or career opportunities of citizens, on the efficient allocation of resources (skills and capital) in the EU labour and Internal Market, as well as on the shock-adjustment capacities within the Eurozone. 2.1 What are the problems? The EU has developed an extensive body of legislation regulating the free movement of workers and setting rules on the coordination of social security regimes. Annex 6 provides an overview of legislation in this field. In addition, a number of committees and networks have been set up to support the implementation and enforcement of those rules (see Annex 7). Against the backdrop of this formal legislative and institutional framework, however, two major challenges undermine effective cross-border labour mobility and compliance with EU rules. 1) Inadequate information, support and guidance function for individuals and employers in cross-border situations Awareness of rights, obligations and procedures deriving from EU mobility legislation is a crucial element in informing the decisions of citizens and companies to seek a job, work or operate in another Member State. Having access to relevant information – for instance, about applicable wage levels or administrative requirements when posting workers, the eligibility conditions of social security benefits in another country, national contact points able to provide assistance – is ultimately about the effective exercise of EU rights to free movement. In order to provide such information, the EU has produced a number of web-based portals and tools, which are summarised in Annex 9. While the European Commission has taken steps to improve guidance and recently proposed initiatives to streamline access to these existing online tools and portals , challenges remain in the provision of tailored information and services to citizens and businesses to support their mobility choices. For example, in the road transport sector specifically, comprehensive information sources to assist road transport workers and operators are virtually inexistent at the EU or national level. As a consequence of inadequate information, citizens may not be aware of their rights, for example, to access unemployment benefits in another EU Member State or of the wage level they are entitled to when being posted to another Member State. Likewise, companies, especially SMEs without dedicated staff, may not be aware of the administrative requirements or the exact wage level that they need to comply with when posting workers to another Member State. In addition, gathering information about and carrying out administrative procedures to establish a cross-border subsidiary or hiring employees in another Member State is estimated to produce 80% extra costs with respect to a domestic business. 2) Inadequate cooperation between national authorities on rule enforcement The capacity of national authorities to enforce EU and national rules in the field of labour mobility is in certain cases highly dependent on their ability to cooperate with one another. For example, a national authority may need to contact a competent social security institution of another Member State in order to verify whether a posted worker is socially insured in that country. Administrative cooperation includes many different aspects, including common administrative and operational procedures, tools for data exchange, and a shared framework for carrying out controls and inspections involving individuals or entities operating in more than one Member State. The framework and tools for administrative cooperation in the EU are however inadequate to effectively address the challenges at hand. Section 2.2 presents a more detailed analysis of the drivers of this problem. Inadequate cooperation has adverse consequences on rule enforcement, mutual trust between administrations, as well as practical effects on EU citizens. Fraudulent practices such as letterbox companies are not effectively contrasted with tangible fiscal costs, including unpaid social security contributions, ranging between an estimated EUR 64-86 million EU-wide solely in the road transport sector. The fight against social fraud also has significant impact on businesses and workers affected by unfair competition. Timely communication of changes in personal information of citizens living in different Member States is conducive to more efficient administration of cross-border cases with benefits for citizens, in terms of receipt of legitimate social security benefits, and for authorities, in terms of savings from avoiding cases of unduly paid benefits. Smooth experiences with portability of social security rights may boost the propensity to move abroad for professional reasons, while ‘negative’ experiences are likely to have opposite effects. 2.2 What are the problem drivers? The two major problems described above find their concrete origins in a set of underlying problem drivers summarised in Annex 5 and detailed below. 2.2.1. Inadequate support and guidance for individuals and businesses in cross-border situations, including incomplete or sparse information available to the public concerning their rights and obligations. The information provided on EU and national portals with a focus on mobility is incomplete with regard to a number of aspects. Your Europe Advice (YEA) and SME feedback database show numerous cases of request for practical information on requirements or rights in cases of posting or cross-border work, particularly in the context of the road transport sector (see Annex 12). While the problem may sometimes be a lack of citizens' awareness of an existing source of information, in other cases the quality or the extent of information provided by EU or national sources may be missing, inadequate or outdated. In the case of EURES, making available EU-wide information about national vacancies has still wide margins of improvement. The new EURES regulation aims at addressing some shortcomings on the transparency of information on vacancies and on minimum-standard services, national implementation being a necessary yet not sufficient factor. There is thus a need for continuous work on information provision by the national and EU levels. For example, in the area of the posting of workers, practical information on applicable working conditions or administrative requirements should be offered by Member States in a single national website, the Commission having a support role. Continuous monitoring and content adaptations also in line with users' feedback are essential elements in order to ensure an uniform level of information standard, as well as a continuous update of information (e.g. applicable wage agreements) is delivered across the Member States. On EURES, an untapped potential remains with a) exploiting labour market information to underpin matching and recruitment activities (involving the analysis of labour shortages and surpluses and including perhaps the use of big data, data crawling as regards job opportunities available) b) the strengthening of the capacities of client services to operating across borders, and c) the provision of holistic and personalised information on working and living conditions in other countries. While the Commission's proposal on a Single Digital Gateway (SDG) will address issues related to the on-line 'findability' of information and easiness of access to existing EU portals, including EURES, content-feeding and strategic planning of websites will remain to be effectively managed.

Stakeholders' views Respondents to the public consultation on a European Labour Authority echoed the points outlined above. A majority of respondents were of the view that insufficient access to information and transparency on cross-border mobility rules is a problem both for individuals and businesses (see Annex 2 for a more detailed analysis). Similarly, in the context of road transport, 53% of the respondents to an OPC carried out in 2017 considered that EU guidance on explaining relevant EU legislation in this field was not, or only partially, useful. This is especially problematic in view of the different interpretation of EU road transport legislation. Within the context of the targeted consultations, certain stakeholders underlined the challenge of incomplete or scarce information concerning labour mobility conditions and opportunities. The social partners considered improvement of information necessary, with employers focusing notably on the posting of workers and trade unions including information on industrial relation systems, wages and wage-setting systems. 2.2.2. Insufficient access to and sharing of information between national authorities responsible for different domains of labour mobility and social security coordination Exchange of documents (notably in electronic form) and sharing of relevant data is essential to the enforcement of rules in the area of cross-border mobility, including with a view to fighting frauds and abuses. Examples illustrating the importance of information sharing are numerous. Public authorities in one country need to exchange data with another Member State concerning the social security rights and current residence of a worker in order to assess his or her eligibility to local social benefits (e.g. a worker work for a period in country A and apply for social security benefits in country B). Similarly, the sharing of registration details of a company may serve the purpose of verifying the genuine establishment of a company in a Member State and of detecting possibly irregular situations. In practice, however, the lack of appropriate and timely data sharing is widely seen as a barrier to fighting abuse of EU rules. This is notably the case in the fight against letterbox companies, of infringements of social and market rules in the road transport sector, but also in the exchange of relevant data on social security coordination, including for example to detect fraudulent use of the European Health Insurance Card (EHIC). Currently, EU and national authorities dispose of a range of tools for the sharing of administrative documents and information (listed in Annex 8), such as the Internal Market Information (IMI) system and European Register of Road Transport Undertakings (ERRU). These information-sharing tools have different scope, operational functions and maintenance management, due to the specificity of their respective policy areas and legislative basis. As they were not originally conceived to interact with each other, the degree of inter-operability is very low. Yet, this separation of cooperation instruments between interdependent policy areas hampers the effectiveness of rule enforcement, particularly in the event of problematic situations. Addressing real-life situations of fraud requires the simultaneous assessment of multiple elements (e.g. the employment contract, the social security position of a worker, the legal and economic status of a company, etc) whose information may be spread across different tools. Moreover, problems in the lack of horizontally used formalised procedures for administrative data exchange, such as in the case of social security coordination where an electronic data exchange system is currently in the process of implementation by Member States, can prevent efficient controls on cross-border cases. Finally, lack of horizontal coordination between different national authorities competent for separate, however inter-related policy areas amplifies the limits to cooperation at EU level, for instance, between labour and road transport inspectorates and social security institutions. In some cases, the first-step difficulty of cooperation is the identification of the relevant counterpart in another Member State, facing cross-country institutional variation. EU-level gaps in coordination on the exchange of information have been partially filled by bilateral or multilateral cooperation agreements, in the areas of the posting of workers or undeclared work or international road transport operations. This aspect is discussed in section 2.2.3 (see also Annex 12). Stakeholders' views A majority (64%) of respondents to the public consultation were of the view that the difficulty that national authorities faced in accessing relevant documentation from other Member States constituted a challenge to effective cross-border cooperation. Similarly, within the context of the targeted consultations, the challenge most frequently mentioned by the various stakeholders in relation to cross-border cooperation related to the effectiveness of information exchanges. The majority of Employment Committee (EMCO) members and certain members within the Committee of Experts on Posting of Workers (ECPW) and within the Mutual Information System on Social Protection (MISSOC), saw inefficiencies in terms of information exchange and access to information by competent authorities as a major cause of social security fraud and abuse and a major challenges to overcome at EU level. 2.2.3 Insufficient capacity of competent national authorities to organise cooperation with authorities across borders

Second, many national competent authorities lack the specialised knowledge to deal effectively with cross-border cases. A number of challenges can be pointed out. There is an issue with specialisation on cross-border cooperation and EU rules, as some Member States have dedicated staff working on cross-border issues, whereas others do not (see Annex 12, table 3). In this regard, training is crucial. Investigative staff sometimes lacks a common understanding of procedures, in the case of social security coordination, or the capacity to analyse data in digital tachographs, in the case of international road transport legislation . Against the background of budgetary restrictions, funds for training dedicated authorities may not always match the real needs. Similarly, linguistic difficulties are reported to be a significant hurdle to efficiently and effectively operate in a cross-country context, making it difficult for untrained staff to communicate with a counterpart in another Member State and/or to understand a relevant document in another language. Finally, IT development capacities also differ across countries, due to different levels of digitalization of administrative acts or procedures, for example in case of registration systems on posting or the digitalization of sickness insurance registers. This can also have an impact on the effectiveness of possible checks and controls. Different administrative capacities may impact in the efficiency of administrative processes, for example the time necessary to reply to a request by another Member State, which often requires more complex checks on national data. In addition, the training of administrative staff on cross-border issues may also directly impact on citizens, if local authorities are not prepared to handle correctly and clearly information on social security coordination rights or establishment requirements. Almost 60% of enquires to SOLVIT concern social security issues and their number doubled up to 1,100 per year between years 2012 and 2015. Stakeholders' views A majority (60%) of respondents to the public consultation on a European Labour Authority were of the view that Member States' insufficient resources constituted a challenge to cross-border cooperation. Similarly, within the context of targeted consultations, stakeholders highlighted that differences in administrative capacities among the Member States act as a barrier to effective cross-border cooperation; this was especially the case among members of the Mutual Information System on Social Protection (MISSOC). 2.2.4 Weak or absent mechanisms for joint cross-border enforcement activities Effective rule enforcement requires credible deterrence measures and capacities to detect and sanction frauds and abuses, such as non-genuine postings, bogus self-employment, and letter-box companies. While labour inspections are a national competence, the EU does not provide a comprehensive institutional framework or operational support to inspection activities in cross-border cases, with the exception of pilot activities in the context of the UDW Platform. At present, coordination in cross-border inspections rests on voluntary cooperation between Member States, which implies uneven geographical and thematic coverage, resources, and patterns of cooperation. In the social security coordination domain, for example, international inspections and monitoring actions are reported to be insufficient, beyond a few Member States. An established tradition of bilateral agreements (or informal arrangements) has developed as a result of the lack of EU-level cooperation on inspections in the field of the posting of workers, undeclared work and health and safety regulation. While there is no comprehensive and up-to-date record of such agreements, some examples have been collected and analysed via the UDW Platform and by the Eurodetachement project (see Annex 10.2). The Benelux Workgroup has a particularly ambitious cooperation on cross-border fraud in the field of posting and social security coordination, and similar arrangements are developed within the Nordic Council. In the road transport sector, Euro Control Route (ECR) - a voluntary group of European Transport Inspection Services – puts together 14 Member States to improve road safety, fair competition and labour conditions in road transport, including through concerted enforcement initiative. While bi-/ or multilateral cooperation agreements have the advantage of being tailored to the specific needs of the involved Member States, they also bear the risks of non-institutionalisation and non-systematic approaches. An assessment of existing agreements in the field of undeclared work pointed to key barriers, such as the lack of cooperation and enforcement mechanisms, the volatility of political investment in cooperation, and technical barriers to the exchange of information (e.g. differing legal competences between the contracting authorities, languages, and data collection methods). In the social security coordination field, moreover, bilateral agreements on data exchange resulted in a variety of rules and procedures, with the resulting administrative complication, to be overcome with the introduction of the Electronic Exchange of Social Security Information (EESSI) IT system. Moreover, national administrations bear the entire operational and administrative brunt of the organisation of concerted actions, including the coverage of unexpected limits to an investigation as, for example, the need for a translator with workers of different nationalities involved in a case. Similarly, the scope, content and functioning of these bilateral agreements can vary substantially, with exchange of information and operational aspects being subject to the will of the parties to comply with engagements. The lack of common analytical and intelligence capacities can be seen as a related problem. Some Member States dispose of advanced IT tools to collect, share, match and mine data with a specific focus on fighting tax and social security fraud and undeclared work – complete with early warning systems which may trigger inspections on the ground. However, these tools rarely reach out beyond national borders, despite of the potential for fighting cross-border fraud showed by some best practices, such as that of the Benelux Union. While in the road transport sector the lack of data sharing seems to be particularly important, also in the field of social security there have been calls to set up a European level database registering migration outflows and inflows for the purpose of monitoring the place of residence of workers and recipients of cross-border social security benefits. Stakeholders' views

Respondents to the OPC favoured an EU-level role in the coordination of joint inspections by national administrations by 64%. Within the context of targeted consultations, a number of institutional stakeholders underlined the value of national competence to carry out labour inspections and the functioning of cooperation through bilateral agreements. 2.2.5 Lack of a cross-border mediation mechanism between Member States across all domains of labour mobility and social security coordination The management of cross-border cases involving national authorities in two or more Member States may give rise to administrative disputes, for example in case of contested information in PD A1 documents for posted workers. Recourse may be made to national courts and ultimately to the European Court of Justice (ECJ). However, judicial recourse and infringement proceedings are costly in terms of time and resources. Conciliation may represent a more efficient and rapid resource. At EU level, a conciliation mechanism exists only in the social security coordination area. Annex 12 describes how the Conciliation Board (CB) acts within the Administrative Commission (AC) to resolve disagreements. The dialogue and conciliation procedure has certain in-built shortcomings. Both parties need to agree to bring the case in front of the CB, the scope of conciliation is limited to the social security aspects of posting, while such interpretation discussions and disagreements are also very relevant in other areas of social security coordination such as family benefits or the determination of applicable legislation for situations other than posting. Decisions are not binding and there is a lack of monitoring and follow-up mechanisms. Because of these challenges and the length of the process, the vast majority of cases are resolved in a bilateral manner between Member States during the two phases of dialogue procedure. Between 2010 and 2017 only nine cases were submitted to the Conciliation Board of the AC. The full "life-cycle" of a case can be as long as over 3 years. There is therefore potential for two-fold improvements. First, the existing conciliation procedure in the context of the AC can be made more effective and a review is on-going to address existing challenges. Second, a more comprehensive approach and more systematic follow up to dispute settlement could be beneficial, extending to other areas of social security coordination, to the posting of workers and to social legislation in the road transport sector, where currently there is no dispute settlement mechanism among national authorities. Stakeholders' views A majority (51%) of respondents to the public consultation on a European Labour Authority were of the view that the lack of fora for dispute settlement constituted a challenge to cross-border cooperation. Within the context of targeted consultations, social partners disagreed on this point. While employers organisations, such as BusinessEurope, were more sceptical of the idea of giving the ELA a dispute resolution function due to potential interference with the work national courts and the ECJ, trade unions, including the ETUC, were more in favour of the idea so long as the ELA provided out-of-court solutions. For the Nordic-Baltic-Polish EU Information Group that absence of a forum for dispute settlement beyond the area of social security coordination was a challenge. 2.2.6. Insufficient cooperation set-up at EU level Several EU committees and networks operate in the area of labour mobility and social security coordination (henceforth referred to as "bodies"). They are based on separate legal acts and refer to specific thematic domains. While all were designed to support the implementation of relevant EU rules, because they were developed independently, these EU bodies are characterised by an asymmetric institutional design. For instance, only the AC has quasi-legislative powers – being able to adopt interpretative Decisions – and meets on a regular basis. Other committees (ECPW, FMW) act as discussion fora with little to no decision-making or operational powers. The UDW Platform constitutes a forum based on voluntary participation, with an analytical and operational focus, the latter having however limited resources. Annex 7 provides a detailed presentation of each body and an overview of its tasks. A further comitology Committee on Road Transport plays an advisory role to the Commission and facilitates dialogue and mutual assistance between Member States in the field of implementation of the social legislation in road transport. Box 1. EU bodies in the areas of labour mobility and social security coordination The EU bodies that make up the EU's institutional landscape in the areas of labour mobility and social security coordination are: the Administrative Commission for the Coordination of Social Security Systems (AC) (including its Advisory Committee for the Coordination of Social Security Systems, the Conciliation and the Audit Boards, and its Technical Commission) the Technical Committee (FMW) and the Advisory Committee (AFMW) on the Free Movement of Workers, the Committee of Experts on Posting of Workers (ECPW), the European Platform tackling Undeclared Work (UDW Platform) and the EURES coordination group. They play a valuable role in supporting cooperation between national authorities. However, an analysis of their work reveals a number of shortcomings. First, these EU bodies are limited in their ability to provide operational and technical support to national authorities. Because of their asymmetric institutional design, only two of them provide limited operational and technical support to national authorities. Specifically, the AC has a conciliation mechanism, where a dedicated Conciliation Board addresses disagreements between national authorities in matters of social security coordination. Similarly, the UDW Platform is mandated to facilitate common activities between Member States. Otherwise, EU bodies are primarily designed as fora for the exchange of information, good practices and ideas between relevant national authorities and stakeholders. Accordingly, they are either not mandated or lack the capacity to provide operational support to national authorities to strengthen cross-border cooperation. In practice, this involves a limited number of activities to support staff exchanges, joint campaigns, trainings, and joint inspections. Yet operational support on cross-border issues is something that Member States would benefit from and which the EU is best placed to provide. The lack of operational capacity translates into a joint action gap to address problems of cross-border nature. Second, artificial separations exist between these bodies. In-depth specialisation of each committee on its target legislation is not matched by the development of interlinkages with other bodies competent on neighbouring policy areas. For instance, in the case of posting expertise is divided between labour law specialists in the ECPW (on working conditions issues) and social security experts in the AC (on security aspects, including the issuing of PD A1 forms), and likewise between the TFMW and the AC as regards to mobile workers, while problematic issues may cut across the two policy areas. Certain activities thus overlap leading to duplications in their work, for instance this is the case of UDW Platform and the ECPW. Third, these bodies have no permanent structure. The frequency of the meetings varies greatly between the over 90 meetings per year of the Administrative Commission (and of its attached committees, under various formations and sub-groups) and the two meetings per year of the ECPW and technical committee of FMW. In addition, the EU has four decentralised Agencies in the employment and social domain (see Annex 13). However, none of them has a cross-border focus in their mandate and, despite valuable expertise in related fields such as labour market research (Eurofound), health and safety at work (EU-OSH) and vocational education and training (Cedefop), they do not provide any operational support to Member States either. Similarly, there is no EU agency in the road transport sector, unlike in the other modes of transport (railways, aviation, and maritime transport). Box 2. Decentralised Agencies in the area of Employment Four decentralised agencies operate in the employment policy area: European Foundation for the Improvement of Living and Working Conditions (Eurofound), European Centre for the Development of Vocational Training (Cedefop), EU-OSHA (European Agency for Safety and Health at Work) and European Training Foundation (ETF) and they are currently object of a comprehensive evaluation. Annex 13 provides an overview of their work. An on-going meta-evaluation has been mandated to examine synergies among them. This evaluation is done in line with the Commission's Better Regulation Guidelines and the Financial Regulation requirements. It encompasses both an individual assessment of each agency as well as a cross-cutting and comparative perspective for the period 2011-2016, and a prospective assessment with regard to the future functioning of the agencies. The evaluation is not linked to the landscape of committees and policy bodies in the area of cross-border labour mobility and social security coordination. From a preliminary assessment, the material scope and functioning of each Agency presents few elements of commonality with the present initiative. None of these agencies has a cross-border focus, while the ETF operates in the EU neighbourhood area. Conversely, the specific expertise of each agency contributes to relevant employment policy objectives in their respective fields, while the cross-border labour mobility has a strong horizontal dimension. The predominant research-centred approach of most agencies (except the ETF) only limitedly fits with the operational needs in the labour mobility area. While there may be potential synergies as regards the research area, the analytical needs to enhance operational cooperation on mobility exceed existing availabilities in the agencies and require further and integrated expertise. A more thorough assessment of the possible interaction between this initiative and the existing decentralised agencies is provided in section 8.

Stakeholders' views As mentioned above, both respondents to the public consultation and targeted consultation highlighted that differences in the administrative capacities among the Member States act as a barrier to effective cross-border cooperation, thus supporting the view that insufficient operational support at EU level was a challenge. On the issues of fragmentation, a majority (70%) of respondents to the public consultation noted that the fragmentation of EU cooperation networks in different areas of cross-border mobility was a challenge to effective cooperation between national authorities. 2.3 How will the problem evolve? EU labour mobility has shown an upward trend throughout the crisis (the number of people living or working abroad almost doubled over the past decade, to 17 million by 2017), mainly due to flows from the EU-13 and increasingly from Southern European Member States towards Northern Europe. Besides, patterns of mobility have also evolved to cross-border mobility and temporary mobility for the purpose of care treatment or service provision. The posting of workers has surged by 68% compared to 2010 (from 1.23 to 2.3 million in 2016). While remaining relatively low as a proportion of the total working population, EU mobility still involves some 17 million EU citizens and particularly affects some countries (both from a sending and from a receiving perspective) and economic sectors (see Annex 12.1). Also due to the stabilising role played by labour mobility in the Eurozone in case of asymmetric shock, there are few elements to assume that the relevance of EU mobility – in its various forms - may scale down in the future. In addition, the recent years have witnessed increasing concerns as regards to social fraud related to cross-border mobility, e.g. in connection to social security coordination or posting rules. Experimental estimates on a plurality of sources indicate a lower bound of about 2.6% of EU-mobile workers (about 400,000 individuals) possibly involved in undeclared work activities with variations across-countries. Similarly, fraud in social security coordination does not currently affect but a minority of the total (See Annex 12.4). The phenomenon may be underestimated, as it is based on figures from a few countries, although there is little evidence that cross-border fraud is higher than domestic fraud. It could also be argued that, absent adequate cross-border controls, social fraud is not realistically detected. In any case, with possibly increasing mobility flows, social fraud will continue to represent an associated, persistent element. Recent legislative developments have addressed the problems of better information and services to mobile citizens and companies, although more support will still be needed. As mentioned in section 2.2.1, the Single Digital Gateway proposal, if adopted, may improve the 'findability' and quality-check of information provided through various EU sources, including EURES. Nevertheless, content-feeding and constant updates of EU portals will remain challenging and resource-consuming tasks to be carried out. As regards posting, the full implementation of the 2014 Enforcement Directive has consolidated a set of single national websites, while the free movement bodies established to support equal treatment and provide legal assistance will also stabilise. However, ensuring even quality standards and constant updates across the Member States will require constant monitoring at EU level. Some sector-specific information, most notably on the working conditions and requirements in international road transport operations, will have to be produced also in light of new legislative initiatives in that area. Through the implementation of the 2016 EURES Regulation, the number of job vacancies and CVs available on the Portal is expected to substantially increase. Limits to national capacities and human, financial and IT resources may however affect the expansion of the EURES network, with consequent needs for a stronger involvement of partner organizations for a holistic approach and reinforcement of activities in relation to information and services provision. Recent legislative initiatives have also aimed at strengthening enforcement tools. Following the 2014 Enforcement Directive, the use of the IMI system to exchange administrative information and notifications between the Member States on postings will continue to take hold. For social security coordination, EESSI will replace the current paper based exchanges and it will allow national competent institutions to contact their counterparties in other Member States electronically. It should create a faster, more efficient, and secure data exchange. However, at the same time, the reasons for difficulties in cooperation encountered today, beyond those of the inherently time consuming nature of postal exchanges, remain to be tackled. There is a need to improve clarity on national case handling deadlines, put in place operational procedures for addressing situations of delayed replies, and provide support to Member States with capacity building to optimise the handling of cross-border cases, as well as to provide ongoing support and training for the introduction and use of EESSI across all institutions. Limitations (for instance in the case of undeclared work) and further developments will be managed at EU level, although it is unlikely that synergies between the instruments will be exploited. Current cooperation tools will come under increasing pressure to ensure consistent and fair enforcement of new rules currently under negotiations on posting, posting in the road transport sector and social security coordination. While IMI statistics currently show that information requests on the establishment and registration of companies rank as most frequent (see Annex 12.4), control tools on letterbox companies would remain inadequate, for example on the inspection angle. The UDW Platform provides for limited resources to support joint inspections and capacity building, but the organisational effort in providing effective coordination would continue falling on the Member States. Bilateral agreements would continue providing the basis for cooperation with uneven functioning across the EU and few extra EU resources to cover for limited resource capacities in some Member States, especially where staff availabilities do not yield specialisation in cross-border issues. The problem would notably be intense in the road transport area, where poor EU-wide coordination of control activities would leave voluntary networks shouldering the impact of high pressure, possibly new rules, and decreasing national enforcement capacities. While the UDW Platform would continue to providing a forum of exchange of best practices, the cross-border dimension represents but one aspect in the agenda and operational resources remain essential, beside the limitation of the voluntary participation. In addition, mobility being constant, ineffectiveness or absence of conciliation mechanisms between administrations would continue discouraging dispute settlement fora and rather encourage court settlement. Finally, in the occurrence of labour disruptions affecting multiple Member States, the relevant authorities and stakeholders would dispose of the Globalisation Adjustment Fund and would benefit from the guidance of the Quality Framework for Restructuring, yet with little further assistance or coordination from the EU level. 2.4 Scope of a European Labour Authority The thematic scope of the initiative will focus on the core areas of cross-border labour mobility and social security coordination rules through the efficient and effective enforcement of Union law on labour mobility and social security coordination, as well as of collective agreements implementing such Union law. EU law on labour mobility pertains to the (1) free movement of workers and the (2) posting of workers, which lay down workers' rights in different mobility situations. Cooperation on (3) undeclared work is included, as it addresses a phenomenon with particular relevance also in a cross-border context. Social security coordination rules are tightly inter-connected, as they establish the rights to social security of mobile workers, as well as of job-seekers and inactive persons when moving to another Member State. In line with the above legislation, the present initiative encompasses all economic sectors. However, an additional focus is cast on the international road transport sector. The highly-mobile nature of the sector creates specific problems for the enforcement of EU work-related legislation in a cross-border context, in particular posting. Inconsistent and ineffective cross-border enforcement, lacking cooperation and coordination of controls have severe consequences on the fairness of competition for both drivers and companies. The personal scope of the initiative would be in line with that of the EU legislation covered in the initiative's thematic scope. This means that ELA would support Member States in the implementation of EU rules in relation to the persons who are covered by these rules, for instance by providing advice to workers on exercising the right to free movement of workers or supporting the implementation of social security coordination rules in relation to all insured persons to whom these rules apply (whether worker, family member, pensioner, tourist, etc.). It also includes mobile third-country nationals, including EU Blue-Card holders, as regards to posting of workers, road transport and social security coordination .

3. Why should the EU act? 3.1 Legal basis The legal basis for ELA pertains to the free movement of persons and services and the right to establishment, established in Articles 46, 48, 53(1), 62, and 91(1) TFEU. Article 46 assigns to the European Parliament and Council the duty to issue rules on the free movement of workers, including the cooperation between national employment services, the abolition of obstacles to the search, matching and take-up of employment in another member State. Article 48 provides a similar task with respect to the adoption of measures in the field of social security as a necessary accompanying measure to the freedom of movement for workers. As regards to the freedom to provide services across-border, Article 53(1) TFEU foresees measures to facilitate taking up and pursuing activities as self-employed persons, facilitating posting, while Article 62 TFEU foresees measures to facilitate the freedom to provide services, relevant in the framework of posting. Article 91(1) TFEU posits common rules applicable to international transport, in the framework of a common transport policy. 3.2 Subsidiarity The subsidiarity principle applies since the proposal does not fall under the exclusive competence of the EU. The objectives of the proposal cannot be sufficiently achieved by the Member States at national, regional or local level and can be better achieved at Union level for the following reasons: ·Providing high quality and up-to-date information and services to the public about their rights and obligations in cross-border situations needs to be coordinated at Union level in order to ensure a consistent, clear, and efficient approach. ·The application of Union law in the fields of cross border labour mobility and social security coordination relies on cooperation between Member States, meaning that no Member State can act alone. ·In order to increase synergies and support cooperation between Member States in the application of Union law across the fields of labour mobility and social security coordination, to ensure legal certainty for administrations and individuals alike and to arrive at a shared understanding of enforcement needs, it is also necessary to develop a coordinated and joint approach at Union level instead of relying on what can be a complex network of bilateral or multilateral agreements. 3.3 Proportionality The initiative is a proportional response to the need for operational support and does not go beyond what is necessary to achieve this goal. It does not impose new obligations on Member States, individuals or employers; rather it focuses on supporting cross-border mobility and creating new opportunities. The proposal does not impinge on national decision-making, legislation, or enforcement activities, which remain the competence of Member States. Moreover, it leaves to a large extent to the discretion of Member States how they make use of the possibilities put in place by the initiative. 4. Objectives: What is to be achieved? 4.1 General objective The establishment of ELA will help strengthen fairness and trust in the Single Market by ensuring that EU rules on cross-border labour mobility and social security coordination are enforced in a fair, simple and effective way and by supporting the mobility of individuals and businesses through practical information and assistance. 4.2 Specific objectives ELA will function as a permanent structure and will pursue three objectives in this context: ·Improving access to information by individuals and employers about their rights and obligations in the areas of labour mobility and social security coordination, as well as access to relevant services; ·Strengthening operational cooperation between authorities in the cross-border enforcement of relevant Union law, including facilitating joint inspections; ·Providing mediation and facilitating solutions in cases of disputes between national authorities and cross-border labour market disruptions, such as restructuring of companies affecting several Member States.

5. What are the available policy options? Options to meet the aforementioned three specific objectives are of two kinds: first, what should be done (tasks) and second, how should this be done (delivery aspects). In analysing the different policy and delivery options, no environmental impacts have been identified. Therefore this document does not consider environmental impacts as a criterion to differentiate between the options. Prior to examining possible policy options, this section outlines options that were discarded at an early stage. 1) Transferring new competences from the national to the European level Rule enforcement, information collection and treatment and inspection responsibilities are the competence of national authorities, in line with subsidiarity and proportionality requirements. These competences cannot thus be transferred to the Union level, either in the form - for example - of a European labour inspectorate or through more competences and powers granted to the European Commission. This option is rejected by the unanimity of institutional stakeholders and social partners. 2) Extending the scope of the proposal to cover EU legislation dealing with industrial relations EU legislation in the area of cross-border industrial relations covers negotiations and agreements in EU transnational companies (that have a workforce in more than one Member State) and workers' representation in multinational companies (European Work Councils) in companies with over 1000 workforce, and at least 150 in each of two or more Member States. The implementation of industrial relations in cross-border labour situations is the domain of the social partners, not Member State authorities, and is hence left out of the present initiative. This is also in line with the ETUC’s position that there should be no interference with collective bargaining or the right to take collective action. While ETUC supports the set-up of tools such as mediation mechanisms to resolve disputes, on a voluntary basis, on the implementation of transnational agreements in the case of multi-national companies, this was not echoed by other stakeholders throughout the OPC. 6. Policy Options and their Impacts In order to address the identified challenges that undermine compliance with EU rules and effective cross-border labour mobility (see section 2), seven general tasks are envisaged for the EU level: ·Labour mobility services and information for individuals and businesses tackles the problem of inadequate support and guidance for individuals and businesses in cross-border situations (section 2.2.1); ·Cooperation and exchange of information between national authorities addresses the problem of insufficient access to and sharing of information between national authorities (section 2.2.2); ·Support to joint inspections: tackles weak EU-level mechanisms for joint cross-border enforcement activities (section 2.2.4) ·Cross-border labour mobility analyses and risk assessment; targets both insufficient capacities to organise cooperation (section 2.2.3) and the weak mechanisms for cross-border enforcement (section 2.2.4); ·Capacity building: enhances the capacities of competent authorities (section 2.2.4); ·Mediation between national authorities fills the gaps in the existing conciliation mechanism (section 2.2.5); ·Facilitating cooperation in cases of labour market disruptions affecting more than one Member State addresses the issue of insufficient capacities to cooperate (section 2.2.3). As regards to the specific problem of insufficient cooperation set-up at EU level (section 2.2.6), this is addressed by all of the above tasks, which together would provide comprehensive operational and technical support to national authorities. Below, following the presentation of a baseline scenario, three policy options (‘support’, ‘operational’, ‘supervisory’) are presented, each addressing the seven tasks outlined above. The options are cumulative, that is, each option broadly incorporates the features of the previous one. They each provide a set of coherent and interdependent tasks, making them almost indivisible. Table 1 below provides a synoptic overview of how the seven tasks will be addressed in each of the three policy options. A more detailed explanation and comparison of the tasks as envisaged under the three policy options is provided in Annex 10. ·For instance, under Policy Option 2, it is envisioned that the EU level has an important role in pooling of analyses, collecting data, and organising peer reviews (task 'Cross-border labour mobility analyses and risk assessment'). This task is intimately linked with the creation of a comprehensive mutual-learning programme and training/technical assistance programme (task 'capacity building'), since the data analyses will feed into the design of these programmes. The two complementary tasks have the same level of ambition.

·Similarly, for instance, under Policy Option 3, the EU's task to undertake in-depth assessments of Member States to identify problems (task 'Cross-border labour mobility analyses and risk assessment') is intimately linked with the task of establishing standards for the provision of services at national level based on EU rules (task 'Labour mobility services for individuals and businesses'), and establishing mandatory requirements on information exchange (task Cooperation and exchange of information between national authorities), also only envisioned under Option 3. The two complementary tasks have the same level of ambition and are interdependent since the standards and mandatory requirements it establishes would form a basis for recommendations. Table 1. Synoptic overview of policy options, in relation to tasks Tasks Policy Option 1 (Support Option) Policy Option 2 (Operational Option) Policy Option 3 (Supervisory Option) 1. Labour mobility information and services for individuals and businesses Definition of user needs and business requirements of the EURES Portal. Cooperation with relevant initiatives, tools and bodies at EU and national level (e.g. Your Europe, Border Focal Point, national services). Coordination and enhancement of EURES network. Technical support to MS for the provision of services at national level, including compliance with relevant obligations (e.g. SDG and enforcement directive on posting). Establishing standards for the provision of services at national level based on EU rules. Establishment of a single physical national contact point on labour mobility. 2. Cooperation and exchange of information between national authorities Coordinating role and liaison point between existing bodies. Active support and expertise to competent authorities ensuring cooperation and promoting the exchange of information through the use of relevant IT tools (ESSI, IMI). Establishing mandatory requirements on information exchange, where not provided for by current EU legislation Development and inventory of user-friendly templates in aid of comparability of national procedures. 3. Support to joint inspections Support to Member States in coordinating joint inspections, i.e. organisation of coordination meetings and development of model agreements Pro-active proposals for joint inspections, logistical support, monitoring and follow-up Possibility to launch (joint)-inspections on its own initiative Management of European Inspection Corps (drawing on Member States' inspectorates) 4. Cross-border labour mobility analyses and risk assessment Sharing of studies and analyses by relevant EU bodies Analyses, risk assessment, data collection, peer reviews and follow-up recommendations. In-depth assessments of Member States 5. Capacity Building Coordination of mutual learning activities across all mobility areas Set-up of comprehensive mutual-learning, training and technical assistance programmes, exchange of best practices. Development of pilot code for labour inspections. 6. Mediation between national authorities Provision of expert opinion upon request on all mobility areas Facilitation of dispute settlement across all areas by mediation, including possibility to adopt recommendations. Development of pilot on out-of-court dispute settlement 7. Facilitating cooperation in cross-border labour disruptions Awareness raising among stakeholders about the EU Quality Framework for Anticipation of Change and Restructuring (QFR) and of relevant EU legislation and financial instruments. Upon request, set-up of ad hoc support to national authorities and stakeholders to facilitate administrative cooperation, information sharing and coordination in the event of cross-border events of company restructuring. Issuing of recommendations as regards to the management of cross-border restructuring, and to the implementation of relevant EU legislation, including business insolvency and information and consultation of workers. 6.1. Baseline scenario Without any action, the existing legislative framework continues to apply to mobility information and rule enforcement support, with possible integrations deriving from proposals currently under negotiation or implementation. Content creation, update and expansion of the Your Europe and the EURES Job Mobility portals remains mainly up to the Commission and the Member States, with limited EU coordination and support on other mobility issues such as posting or road transport. Exchange of administrative information takes place through the IMI and, from 2019, EESSI, beside other channels possibly established on an ad-hoc basis through bilateral agreement. The Commission carries out labour mobility analyses, while more sophisticated risk assessments are developed at national level with little to no pooling at EU level. Coordination of cross-border inspections remains limited to voluntary action within the current scope and means of the UDW Platform and, for what concerns the road transport sector, the ECR. Existing conciliation mechanisms continue to apply in the social security coordination domain, but not in other mobility areas. Capacity building is limited to the mutual learning programme of the UDW Platform and to voluntary action within the scope of the ECR in the road transport area. The Commission raises awareness on the good practice collected in the 2013 Quality Framework for Restructuring and runs the European Globalisation Adjustment fund, while Eurofound monitors company restructuring events and provides information on national frameworks for restructuring through the European Restructuring Monitor. 6.2 Policy Option 1 (Support option) The ‘support’ Option 1 constitutes a ‘light-touch’ approach adding up a few changes to the baseline scenario whereby the EU level expands or coordinates existing activities or programmes, or extends these from one specific area to all other mobility areas. The EU-level expands and coordinates existing information services by ensuring further development of the EURES portal and, in cooperation with Your Europe, by monitoring information provided on posting and road transport sector legislation. It also builds on existing cooperation tools in different mobility areas by promoting coordination between them and suggesting improvements on issues of cross-cutting concern (e.g. letterbox companies). It extends current support to joint inspections in the context of the UDW Platform by facilitating coordination meetings between labour inspectorate authorities and developing model agreements, upon the request of Member States. It compounds analytical reports dealing with different mobility aspects produced by EU and national institutions and ensures follow-up to problems signalled by citizens and companies on SOLVIT. Mutual learning activities under the UDW Platform are extended to all mobility areas in order to support administrative capacity building in accordance with strategic priorities. The EU level extends the conciliation mechanism of the social security coordination area to all mobility areas through the provision of expert opinions and monitors the follow up to those opinions. Drawing on the Quality Framework for Restructuring, the EU level raises awareness of its legislation, financial instruments and guidance also based collection of experiences through Eurofound's Monitoring instrument in order to support stakeholders affected by restructuring cases with cross-border implications. 6.3 Policy Option 2 (Operational option) The ‘operational’ Option 2 expands activities laid down in the previous Option 1 by adding further operational activities in each task. Through the management of the EURES network, the EU level extends the scope of its activities to technical support to the Member States for the provision of information to citizens and business all across the mobility spectrum, thus including posting and social legislation in the road transport sector. The information exchange is actively supported through the promotion of the use of electronic tools and procedures (e.g. EESSI, EURES and IMI) also with a view to their further evolution, as well as on facilitating cooperation through National Liaison Officers. In agreement with the involved Member States, it assumes the role of launching and providing coordination and logistical support to joint cross-border inspections including action to ensure their follow up. The EU level compounds analyses and data collection on different labour mobility aspects from different sources, and becomes a permanent observatory on mobility, also through the collection of more specific data to inform joint inspections or capacity building programmes; it organises peer reviews among Member States and outlines possible measures to address identified challenges. The EU level runs comprehensive mutual learning and technical assistance programmes, also in accordance with the priorities identified in the other tasks. The existing conciliation mechanism, which is extended to all mobility areas, is formalised by a mediation mechanism aimed to provide the possibility of recommendations to the involved Member States to solve issues identified. In the event of restructuring cases with cross-border implications, the EU level activates – upon national authorities' request - ad hoc support charged facilitating administrative cooperation, providing guidance on EU legislation and financial instruments and coordinating interventions, including through involving EURES. 6.4Policy Option 3 (Supervisory option) The ‘supervisory’ Option 3 expands activities laid down in the previous Option 2 to achieve a more thorough EU-level integration of certain functions which are not foreseen in the current framework, yet within the limits of EU competences. Through the management of EURES, the EU level adds up standards for the provision of mobility-related services to citizens and companies at national level with a view on the establishment of single physical contact points. Where necessary, the EU level can set additional mandatory information exchange requirements to be implemented through the existing tools. On joint inspections, the EU level retains the right of initiative and sets up a specialised 'European Inspection Corps' composed of national detached experts. Drawing on peer reviews and labour mobility analyses, the EU level can launch in-depth assessments of Member States capacities for a thorough analysis of potential weaknesses and shortcomings, and on these basis issues recommendations to Member States. In addition to the mutual learning and technical assistance programmes for capacity building envisaged in Option 2, the EU level lays down a common rule-book (code) laying down standard procedures for labour inspections. The mediation mechanism extends to include a pilot out-of-court arbitration systems for certain cases. The EU level intervenes both to provide guidance on available EU resources to address cross-border labour disruptions, but also to provide recommendations to national authorities and stakeholders on the effective application of relevant EU legislation, including on insolvency and information and consultation of workers. Stakeholders views on the possible tasks of a European Labour Authority Regarding the possible tasks for a European Labour Authority, the open public consultation showed that a majority of respondents envisioned that a new Authority could usefully provide a wide range of operational support to Member States. These include: coordinating systematic cooperation and information exchanges between national authorities (75%), providing technical assistance and capacity building to enforcement authorities (67%), providing analytical support and intelligence (67%), coordinating joint inspections (64%), providing a dispute resolution mechanism (64%), supporting the provision of information to individuals and businesses (73%), support the rationalisation and streamlining of administrative practices at EU level (73%). Results of the targeted consultations echoed the same support for a broad range of tasks; in particular members of the Administrative Committee were generally supportive of ELA having an operational focus. Consulted stakeholders, most notably within the EMCO and the UDW Platform, also underlined that an Authority could support the better integration and coordination of existing EU bodies in order to ensure greater synergies between them. There was clear support among stakeholders – including within the AC, the ECPW, the PES network, social partners (UEAPME, ETUC, EFBWW, etc.), and a number of civil society organisations - for a new European Labour Authority to play a role in providing a single point of access to standardised information available in all European languages to individuals and organisations alike. A number of stakeholders underlined that the Authority could also be charged collecting and regularly updating listings of EU and national relevant legislation and competent authorities. Similarly, there was strong support among stakeholders for a new European Labour Authority to act as a platform for information exchange between national authorities. It was also underlined by certain stakeholders that ELA could manage IT solutions (such as EESSI, the future ESSN) and ensure statistical data collection. Closely related to this, some stakeholders (including members of the AC) underlined that ELA could support research and analysis in the area of cross-border mobility. A number of targeted stakeholders shared the view that ELA could usefully provide technical assistance and capacity building to enforcement authorities. In particular, BusinessEurope was of the opinion that technical assistance and capacity building for national enforcement bodies should be the central aim of the initiative. A common opinion by the PES network suggested that ELA could help to strengthen collaboration among different labour market actors at EU level and support a systematic approach for evidence-based learning between Member States, building on the Benchlearning exercise of the PES network. Institutional stakeholders broadly underlined the importance of respecting national competencies, particularly in the area of labour inspections which should remain in the hands of Member States. However, a great number of stakeholders (including those who underlined the importance of respecting national competencies) were also of the opinion that a European Labour Authority could valuably support national authorities in conducting joint cross-border investigations. In particular, this point was made by members of EMCO. A report adopted by the UDW on the creation of ELA noted that while any joint investigations should be entrusted to national authorities, ELA could address outstanding issues, such as cross-border participation in controls in another Member States, facilitating the understanding of other national laws and procedures, and of the effective use of evidence during inspections. At the dedicated hearing with social partners, trade unions noted that while a European Labour Authority should not interfere in functioning of national labour inspections, it could have complementary role in cross-border cases, providing technical and logistical support. The European Parliament's Employment and Social Affairs Committee argued that ELA could conduct investigation in cases of fraud and abuse. Similarly, a number of targeted stakeholders were of the view that a new Authority could carry out dispute resolution mechanisms in cross-border and social security matters, but were split on whether the decisions should be binding or whether the process should be voluntary and decisions non-binding. For instance the UDW platform noted that ELA could act as a discussion board to facilitate exchanges and as mediator to solve problems between Member States on a voluntary basis. Similarly, in a strategic dialogue with civil society, certain organisations noted that ELA could support a dispute settlement mechanism similar to the one currently in place within the Administrative Commission. It was suggested that such a dispute settlement mechanisms could be extended beyond social security coordination to other areas of cross-border mobility and could be binding.

6.5. Impacts of the different policy options in relation to tasks This section summarises the main expected social and economic impacts of each the three policy options outlined in the previous section. The assessment has a strong qualitative approach. While better cooperation has an impact on improving enforcement, the causal link between the set-up of a new body and socio-economic impacts, including mobility flows, is rather remote, owing to the influence of national legislation and to actual rule implementation. Therefore, the quantification of social or economic impacts was not deemed realistic. 6.5.1 Social impacts Overall, the social impacts of the three policy options would be direct only in the cases of the task relating to citizens' information and services and to the facilitation of solutions during company restructuring processes. The remaining benefits would rather be indirect, as a consequence of better cooperation and information-sharing between national administrations. Under the baseline scenario mobile workers and citizens would continue experiencing information gaps and to be exposed to the risk of abuse or of administrative inefficiencies. Posting conditions (e.g. applicable wages) may become more transparent thanks to single national websites, but still work would need to be done to improve the sector-specific targeting of information, notably - but not exclusively - on road transport posting and social rules. Channelled through the SDG, EURES would gain more findability but still incur limitations in the extent of information provided, as well as in the capacity to extend job vacancy supply. Exposure to fraud or administrative inefficiencies would witness some improvements, but still present some gaps, with particular effect on the road transport sector. Information exchange through IMI contributes to strengthening controls, and so will the implementation of EESSI, also with a view on administrative efficiency. Nevertheless, varying degrees of administrative capacities and extent of bilateral cooperation with other Member States would continue negatively affecting the effectiveness of protection against abuses, for instance in fraudulent posting situations, with generally few opportunities for coordinated cross-border controls and inspections. Information gaps – also cause by the lack of preparation of administration staff may continue leading to low take-up of social security benefits across border simply because of citizens' low awareness.In turn, ineffective communication channels between social security institutions may result in the missing out on acquired rights or could lead to double payments (see Annex 12, section 4). In the event of company restructuring cases with cross-border implications, the EU level would continue to offer soft policy guidance on the basis of the Quality Framework for Restructuring and financial assistance through the European Globalisation Adjustment Fund, within the limits of eligibility conditions to that fund. Tailored support may continue to be provided ad hoc such as in the case of the closure of the Caterpillar plant in Gosselies (Belgium). Policy Option 1 (support option) would marginally improve the provision of information through more integration of EURES with other information areas, including on terms and conditions for posting. A citizen may thus find on the EURES portal more comprehensive information regarding its citizenship, labour, social and fiscal rights when moving to another Member State, under different forms of mobility (permanent or temporary mobility). However, information as well as some underlying services would be provided at a fairly general level which may not reflect his/her particular needs in a given sector, e.g. road transport, or administrative area. EU support to activities in the areas of cross-border labour inspections, intelligence and dispute settlement would remain limited, therefore tangible benefits for workers would be unlikely to materialise. Under largely voluntary cooperation arrangements between Member States, workers in or from non-cooperating countries would notably be at a disadvantage in relation to workers in or from cooperating countries choosing to engage in exchange of information and cooperation. Therefore, the benefits would be uneven for the workforce and citizens across the EU and not be available or easily accessible to all those that need them. In case of relevant company restructuring processes, EU intervention would be limited to awareness raising on the available EU instruments but would not translate into more concrete support to the involved stakeholders, thus with a limited impact on the involved workers. Policy Option 2 (operational option) would lead to a wider access to targeted information and a wider inter-connection between all EU provided services, basing on the EURES network. With further technical monitoring and support provided to check the comprehensiveness of information, EU-level assistance would integrate sector-specific guidance for example on posting and help aligning with SDG-mandated quality standards. Therefore, a citizen moving to another Member State to work in a particular sector, e.g. construction, would find targeted information on working conditions in that sector, including for example the relevant collective agreement or specific health and safety requirements, in this case thanks to collaboration with the competent agency EU-OSHA. With EU-provided coordination of investigations, notably focusing on problematic cross-country flows and sectors identified thorough risk assessment, workers would rely on stronger deterrence potential, as well as on a contact point to which they could turn to in case of need. For example, in the road transport case, more uniform controls would ensure legal clarity and predictability for drivers and guarantee equal treatment in case of non-compliant behaviour, due to more uniform assessment standards. Citizens would also benefit from better administrative efficiency resulting in faster and more certain procedures for the assignment of cross-border social security benefits, and less uncertainty in case of problematic situations as a result of more structured information exchange between authorities in all areas. The intensification of EU-provided training for national administration staff would also ensure better information being conveyed to citizens, for example on their cross-border social security rights, and workers, notably including international transport drivers. While citizens would continue solving possible disputes with administrations through existing means (e.g. SOLVIT or courts), new mediation functions may shorten the period for a decision on disagreements between national administrations and increase the impact of such decision. In the event of company restructuring with cross-border implications, the facilitating role which the EU level would play would especially benefit the affected workers. National stakeholders, notably including the social partners, would receive advice and guidance on applicable EU legislation and possible financial instruments to assist the affected workers, as well as administrative support to coordinate interventions between countries for example on collaboration with EURES for job-search beyond national borders. Policy Option 3 (supervisory option) would entail more mandatory requirements on the services provided through the EURES network of experts, which would advise – as in the option above – on all policy areas. The set-up of physical contact points for labour mobility at national level would enable citizens to access a face-to-face service to collect practical advice in view of their moving to another Member State. More stringent EU requirements would empower information exchange and cooperation on inspections, and strengthen institutional capacities. Citizens would thus benefit from more integration between national administrations in carrying out controls against abuses as well as in exerting more ordinary administrative procedures, for instance in posting situations. EU level recommendations on the management of cross-border company crises may have an appealing character insofar as they may put pressure on authorities and stakeholders to mobilise all possible EU and national resources to help workers retrain or re-employ. 6.5.2 Economic Impacts Examining the economic impacts of different policy options covers both the impacts on national authorities and on companies. 6.5.2.1. Impacts on national authorities This section discusses the impact of the three options on the work of national authorities to improve their cooperation, to better enforce rules, to facilitate labour mobility and to provide information to workers and business. In the baseline scenario, competent enforcement authorities would continue operating with only partially adequate and resource-intensive tools, thus with partial effectiveness in terms of contrasting social fraud and ensuring administrative efficiency. The fight against social frauds would continue to be pursued through the existing (and forthcoming) information exchange tools and several structures working in parallel with a focus on specific areas (such as undeclared work, or social security). While the full implementation of IT tools is expected to continue providing added value, enforcement authorities would continue to work with a focus on questions related to specific policy areas (such as posting, social security information, or transport company information), with little incentive to exploiting the possible synergies between them to investigate potentially fraudulent cases requiring a multiplicity of policy details. Authorities would continue lacking a common source of intelligence and risk analysis. Most notably, however, the effort to organise joint actions (e.g. in-depth information exchange and coordinated inspections) would continue falling upon national authorities with no external support. Investigative cooperation would be efficient to the extent that authorities share similar or common investigative methods and procedures, basing on a common understanding of the respective laws and on a common action framework, such as a bilateral agreement. One or more of these factors being absent or weak, for instance the lack of mutual language understanding or the difficulty in identifying one authority's exact counterpart in the other Member State, would continue making joint action very resource-intensive and ineffective, notably against the background of staff resource scarcity across the Member States. All in all, the inadequacy of tools and cooperation would continue producing considerable losses in fiscal and social security revenue, while feeding in mistrust between administrations. In the absence of changes to the conciliation mechanism addressing its unpredictable length, national authorities would remain encouraged to settle possible disputes on an ad hoc basis and relying on bilateral exchanges in the social security coordination area. Finally, in cross-border labour disruptions events, national authorities would continue to turn to the EU level to apply for and seek technical assistance on the available funds, including the European Globalisation Adjustment Fund. Policy support would continue to take place in the soft form of the Quality Restructuring Framework. Policy Option 1 (support option) would partially improve the tools available to enforcement authorities. National authorities would also benefit from an EU-level support and tentative coordination of joint inspections, coupled with tailored mutual learning activities embracing all mobility areas to reinforce administrative capacities on priority areas to be identified depending on need. Yet, EU-level oversight on information exchange tools would not significantly contribute to advancing the capacities of enforcement authorities, with a particularly negative effect in the road transport area, due to very limited cooperation and lack of support platforms. Authorities may also benefit from expert opinions in all mobility areas in case of disputes, but this would limitedly increase the incentives to use this route to settle disputes. This option would partially improve the visibility and mobilisation of EU tools available to competent authorities and stakeholders, who would increase their awareness of existing instruments and measures applied in different national frameworks and restructuring cases as inspiration for developing national policies, although no further operational support than is currently provided would be offered. Policy Option 2 (operational option) would significantly reinforce the cooperation and coordination tools available to public authorities, with possibly more tangible effects on the capacity to address social fraud and manage cross-border situations. National authorities would benefit from a more centralised support for IT tools for information exchange and from more comprehensive oversight and recommendations on possible synergies and follow-up actions to address problems. A more coordinated hands-on approach may also incentivise the further digitalisation of procedures. A more structured, integrated and operational intelligence capacity would bring an added value to national enforcement authorities to the extent that it would enable to compound different data sources, identify recurrent patterns of mobility or possible fraud, and draw general lessons for the follow up, thus helping national authorities to target their cooperation and investigative action. EU-level support to joint investigations and inspections would both facilitate operations thanks to a progressive streamlining of procedures and practically complement national resources on more resource-intensive tasks, including for example translation of relevant documents. The virtue of EU-support to cross-border investigative activities has already been proven in the existing example of Eurojust, which would provide a useful model. On the basis of common activities, mutual learning and technical assistance programmes would have a more concrete reference. In case of dispute, a revamped conciliation mechanism, which can relate to all cross-border labour mobility areas but also lead to recommendation on how to follow-up would contribute to resolve cases more timely. Finally, national authorities would benefit from technical support in complying with relevant obligations in the provision of services and information to citizens and businesses, which would contribute to reducing cases of duplication of requests and addressing gaps in specific policy domains, for instance in the road transport sector. In the event of labour disruptions with cross-border implications, authorities – but also the social partners - may have the option of requiring assistance to the EU level to help facilitating a solution in order to mitigate the social consequences of restructuring processes, most notably through the coordination of the involved stakeholders across borders and support to application for EU funding opportunities. Policy Option 3 (supervisory option) would provide for more stringent cooperation rules for national authorities with possible negative impact on national capacities, especially in Member States with administrative staff shortages. The creation of physical contact points for information to citizens and companies would require, for example, dedicated infrastructures and resources, which may also duplicate existing obligations in other fields. Mandatory information exchange requirements, in addition to those agreed, for example, in the IMI system, may place an excessive burden on Member States, also in relation to the administrative capacities of a Member State. Likewise, the possibility for the EU level to request joint inspections and send a dedicated EU team on the ground for support may create excessive burden on Member States, and staff resources may not be sufficient to comply with multiple requests. Strengthening capacity building through a binding code for inspections may have the advantage of harmonising information exchange and inspection procedures. However, it may set an excessive constraint on national competent authorities in respecting different procedures than their own national ones, thus also reducing their degree of freedom in line with national legislation and practices. EU-level recommendations, albeit non-binding, on the management of cross-border labour disruption cases would risk going beyond the EU's role in such instances, interfering with the prerogatives of national authorities and of the social partners. 6.5.2.2 Impacts on employers This section analyses the impact of the considered options on employers. As in section 6.5.1 impacts are direct as regards to the information and the restructuring tasks, whereas on the remaining tasks impacts can be assumed to be mostly indirect, as a consequence of more effective rule enforcement and transparency.

In the baseline scenario, employers would continue to rely on existing tools – however more accessible thanks to the SDG – to retrieve information on working conditions, fiscal and social security when establishing or posting workers in another Member States. To the extent that this information is not transparently provided, also as a consequence of varying quality of national sources, or is sparse across different portals, companies – especially SME's – will continue having difficulties in accessing crucial information and guidance. Tools such as IMI and EESSI will lead to improvements in administrative efficiency as regards to the verification, for example, of contested information on the social security position of a posted worker or of a company. However, improvements are not foreseen in terms of fastening delayed replies in the social security coordination area, with consequences on the possible persistence of inefficiencies. The limited scope of cross-country cooperation on intelligence and cross-border inspections will have an effect on the persistence of fraudulent forms of competition, negatively affecting the playing field, especially for cost-sensitive SME's. The weakness of conciliation procedures in case of disputes between Member States would continue to discourage this settlement mode, in favour of non-action or unilateral action, with consequence on the uncertainty for the involved company. In restructuring cases, employers will continue to rely on dedicated EU resources to buffer the social costs of retraining and job-search of redundant workers, while soft guidance is provided on a fair management and anticipation of restructuring processes. Policy Option 1 (support role) would limitedly improve the information basis for business to the extent that the Your Europe Portal – in coordination with other EU networks - would promote the tailoring of information provided by national and EU sources to companies’ needs. As today, a SME seeking to understand, for example, the administrative requirements for posting in another Member State would turn to the Your Europe Portal, which would collect links to national posting websites while monitoring the accuracy of information from a business standpoint, also through feedbacks from SOLVIT or the SME feedback device. Companies would benefit from partial improvements on rule enforcement deriving from a relatively stronger EU role in the coordination of cross-border inspections and wider mutual learning programmes to strengthen national administrative capacities, including those in the road transport sector. While the EU-level’s role would still be limited, some improvements may be observable for companies in terms of better efficiency of administrations to deal with problematic cross-border cases and to exert a deterrence effect on fraudulent companies. Companies will need to turn to national courts for possible disputes with national administrations. However, the possibility for one Member State to request a third-party expert opinion in case of administrative dispute may incentivise the use of a EU-level conciliation mechanism, with benefits for companies involved in such disputes in terms of certainty of results. Companies would get increased guidance on how to deal with major labour disruptions drawing on the Quality Framework for Restructuring and on available EU financial tools, without additional EU level operational intervention. Policy Option 2 (operational role) would improve the quality and targeting of information for companies through wider EU-level technical support to national administrations in order to promote more uniform information standards across the Member States. Companies would gain the advantage of accessing to similar information standards for example when posting workers to different countries in Europe. For SME’s, the development potential of the EURES Portal services would also provide better recruitment opportunities. Wider information exchange between administrations, as well as more thorough mutual learning and technical assistance programmes would increase national administrative capacities and make them more effective to deal with cross-border cases involving companies. Particularly in the road transport sector, the training of enforcement authorities, coupled with a stronger EU framework for coordinated cross-border inspections would allow smoother control processes and more guarantees of fight against unfair competition practices. A more efficient toolkit for national administrations to detect and offset fraudulent competitors would be a particular gain for companies, especially SME’s, with the development of a coordinated and logistical support structure to joint inspections. In addition, EU-level support may cater for translation of documents or assist host state administrations in processing documents, thus yielding possible reductions in the administrative burden for companies undergoing checks and controls. Faster solutions of inter-state disputes would reduce the uncertainty period of involved companies, including in restructuring cases. While companies would still need to turn to national courts for possible disputes with administrations, the conciliation route may become more effective and quicker in case of disputes between administrations. Companies with contested PD A1 documents, for example, may benefit from possibly shorter periods of uncertainty while two administrations verify the necessary documents. EU support in the facilitation of cross-border labour disruption events would have a direct impact on larger companies, i.e. those having a cross-border business organisation. However, SME's may also indirectly benefit from EU facilitation insofar as smaller sub-contractors of affected territories may receive information about possible EU assistance and participate in multi-stakeholder collaboration facilitated at EU level. Policy Option 3 (supervisory role) would entail that information and service standards be mandatory for Member States to respect, thus ensuring that companies receive the same actual quality of information for their cross-border activities; physical national contact points would also provide an additional point of reference for employers in need for concrete assistance in mobility situations. Companies would also benefit from stricter rule enforcement through deeper administrative integration in data exchange, EU-led cross-border inspections mandated by evidence-based indications on suspicious flows and a based on common procedures. However, the specific arrangements would need to be tailored in order to avoid excessive information requests and to pursue the objective of quick decisions. The consequent increase in the deterrence effect vis-à-vis fraudulent companies would contribute to lower levels of social fraud and a more level playing field. Finally, out-of-court settlement possibilities may increase the possibilities for administrations to settle disputes between each other, although individual employers would continue, as in the previous options to rely on instruments such SOLVIT or adhere to courts in order to settle disputes wit