New EEI Study Warns Against Restrictive EU Subcontracting Rules

The European Employers Institute (EEI), of which HOTREC is a member, has published an independent legal study analysing the risks of restricting subcontracting across the EU. The study, led by Associate Professor Erik Sinander (Stockholm University), responds to calls in the European Parliament for an EU legal framework limiting subcontracting and introducing joint and several liability throughout subcontracting chains.

Key Findings: 

The analysis highlights several risks of introducing EU-level restrictions:

• Legal complexity and fragmentation: A new framework could destabilise multiple industries and create uncertainty in the Single Market.

• Competitiveness concerns: Subcontracting enables SMEs to compete effectively. Limiting subcontracting tiers would disproportionately benefit larger companies.

• Definitional challenges: Difficulties in distinguishing subcontracted services from purchased products, and in defining the scope of subcontracting chains.

• Sustainability and employment risks: Restrictions could discourage repair and refurbishment in favour of new purchases, leading to more waste and fewer local jobs.

The study underlines that no existing EU legislation currently limits subcontracting tiers, making such proposals unprecedented and legally challenging.

“This legal analysis provides a crucial perspective on the challenges of further regulating subcontracting. The solution lies not in blanket restrictions but in more effective enforcement of existing labour protections,” said Delphine Rudelli, Chair of the Board of the EEI.

Read the full study here: Restricting Subcontracting Practices: A Legal Perspective

HOTREC’s position

The hospitality sector in Europe is made up of 2 million businesses supporting over 10 million jobs. Almost all establishments are SMEs, and 9 in 10 are micro-enterprises. Subcontracting allows hotels, restaurants, cafés and bars to delegate services to external providers and focus on core operations such as guest experience and management.

HOTREC strongly believes that:

• Hospitality businesses must be free to decide how to organise their services. Any other option would hinder innovation, flexibility and productivity, and may even risk business viability.

• A full chain liability is not proportionate. National legislation already exists to protect the interests of workers and businesses.

• No EU-level legislation on subcontracting is needed.

• To avoid possible abuse, solutions should be found by enforcing existing legislation and encouraging labour inspections.

For more details, see HOTREC’s Position Paper on Subcontracting (July 2025)