New staffing rules proposed for all temporary-worker providers in the Dutch market

The Act on the authorisation of the Provision of Workers (WTTA) introduces a new law to regulate the provision of temporary workers by intermediaries, such as employment agencies or payroll companies, including EORs (employers of record) and platforms. It will apply if a company is based in the Netherlands or elsewhere, as long as they assign workers in the Netherlands to a client to work under the client's supervision and control. This also includes sub-leasing/intermediaries and lenders for whom this is merely a secondary activity. No authorisation is required when taking on or outsourcing work if employees remain under the management/supervision of their own employer, or when hiring out within the same company or between affiliated companies, provided no profit is made. 

The main purpose of the bill is to improve the position and protection of temporary workers, especially migrant workers, and to ensure a level playing field for all providers and users of temporary workers.

Labour market permit

The bill aims to address the problems and abuses that have been identified in the temporary work sector, such as underpayment, exploitation, fraud, and unfair competition. It introduces a system of government-controlled admission for providers of temporary workers, which means that they need to obtain a permit from a public authority before they can operate in the Dutch labour market.

The permit will be granted by the Licensing Authority and is valid for four years. Admission is based on a set of criteria which cover things like identification, integrity, financial security, compliance with labour laws, and quality of service. Compliance with this framework of standards is periodically assessed by independent certification bodies in accordance with the NEN 4400-1 and NEN 4400-2 standards, whilst the Admitting Authority retains the final authority to grant, refuse or withdraw admission.

Obligations for all providers

The bill also imposes obligations on providers of temporary workers, such as informing the temporary workers and the users of their rights and obligations, providing financial security for a minimum amount of €100,000, and cooperating with audits and inspections. It is now clear that a reduced threshold of €50,000 applies to first-time buyers, with an automatic increase after six months. The deposit may be indexed and, subject to certain conditions, may be waived. This is intended to support the admission system and ensure compliance with the regulatory framework. It gives more powers and tools to the Labour Inspectorate and other authorities to monitor and enforce the compliance with the admission system and the normative framework, such as data exchange, administrative fines, and withdrawal of permission.

The bill applies to all providers of temporary workers, regardless of whether they are established in the Netherlands or in another country, as long as they operate in the Dutch labour market: in other words, companies from the UK and US and elsewhere that place workers in the Netherlands without having an office there (which is an increasingly common model in this era of remote service provision) will be caught.

Transitional period

The bill provides for a transitional period for providers of temporary workers who have been active for a long time and meet certain conditions, such as having a valid certificate from a private certification body or being a member of a recognised employers' organisation.

The transitional arrangement applies if you have submitted an application for an exemption or initial authorisation within six months of the WTTA coming into force and the NAU has not yet taken a decision on the application. If the lender holds an SNA quality mark on 30 June 2027, registration for the transitional arrangement is not mandatory and a relaxed arrangement applies whereby an inspection report need not be submitted on this occasion. The assessment will then be based on the SNA quality mark, provided that the other conditions are met. If a temporary employment agency fails to submit its application on time, it cannot make use of the transitional scheme and must ensure that it is fully compliant by 1 January 2028. If this is not the case, they must cease lending staff at that point.

Osborne Clarke comment

The bill is expected to come into force as soon as possible after its approval by the Dutch parliament, except for the provision that makes the violation of the admission system a punishable offence, which will enter into force one year later.

If you have any questions or comments, please do not hesitate to contact Jorgo Tsiris in our Amsterdam office. Jorgo and his team can advise on whether you will need a licence and, if so, assist with submitting the application (if and to the extent your business would not be granted admission automatically as explained above).