The European Union's Commissioner for Social Affairs, Marianne Thyssen, said late on Monday that the ministers backed an initiative by French president Emmanuel Macron to impose a 12-month limit on the "posting" of foreign EU workers.
The move effectively halves an original limit of 24 months, during which companies can send employees from low-wage countries to work in richer member states without abiding by all local labor laws.
Under the compromise thrashed out during 12 hours of negotiations, the EU will also introduce the principle of "equal pay for equal work" giving migrant workers the same remuneration, including salary, bonuses and employment benefits, as a local worker.
"Equal pay for equal work at same place is at heart of 'Social Europe'," Marianne Thyssen wrote on Twitter after the social ministers' meeting in Luxembourg.
The decision came after 18 months of politically fraught talks and was met with a weighted majority meaning not all member states agreed.
However, the Luxembourg agreement temporarily exempts transport workers like truck drivers from the reform and includes a four-year transition period for businesses to adapt to the changes. Companies will also have the option to extend the postings by six months.
The changes will affect about 2 million migrant EU workers and come after some western European governments, notably those of France, argued that cheap foreign workers was feeding anti-EU populism and job insecurity in their countries.
Poland, Hungary and the Czech Republic did not back the proposal, claiming they would hamper their companies' ability to compete in western European markets.
uhe/jd (Reuters, AFP, dpa)