Flexible hiring: what are your options?

There are various options for hiring a temporary employee. These are the 4 types of flexible employment contracts: 

• Model contract (hiring a self-employed professional): hire someone who works independently.

• Temporary employment contract: quickly hire a flexible worker through a temporary employment agency.

• Secondment contract: quickly hire an employee from another employer.

• Payroll agreement: hire an employee of your choice through a payroll agency.

Model contracts for zzp'ers

Are you looking for staff to do work independently? For example, if you want to build a new website or need extra help on a building site. In that case, you can hire a self-employed professional (a freelancer, zzp’er). A zzp’er does not have an employment contract, and decides for themself how they wish to do the work. They also use their own materials or equipment. There may not be an authority relationship between you. The zzp’er is liable for the business risk.

To clarify the work relationship between the zzp’er and the client, the government has passed the Employment Relationships Deregulation Act (Wet deregulering beoordeling arbeidsrelaties, wet DBA).

If you are not sure whether or not you comply with the DBA Act, you can choose to use one of the model contracts. A model contract describes how you work together, and has been approved by the Dutch Tax Administration. This will help you avoid false self-employment. 

Pros

• You can hire a zzp’er for any time period.
• You can alternate between several zzp’ers, so that you always have a backup.
• You do not pay payroll taxes, insurance or holiday allowances. The zzp’er is responsible for paying the taxes. You agree to an hourly rate or an all-in price, so you avoid the risk of unexpected costs.
• A zzp’er is used to working on assignments independently, and can often work flexible hours.
• You do not have to pay costs when the zzp’er is sick or absent.
• You do not have to do payroll administration, the zzp’er usually sends an invoice.
• You do not have a notice period, unless it is in your agreement.

Cons

• Because zzp’er often have more than 1 client, they may not be available right away.

Temporary agency contract

Hiring a temporary employee (in Dutch) is a good choice when you need a flexible employee relatively quickly and do not have time for a thorough induction period. 

There are 3 parties in a temporary agency contract: the temporary employee, the agency, and the hiring party (you). The agency and the employee sign the work contract and the temporary agency is the legal employer. The employee works under your supervision.

Pros

• You can hire a temporary employee for as long as needed, and you can end the contract without a notification period.
• The temping agency will take care of the entire recruitment process and personnel administration.
• As the hiring party, you do not have to pay the employee’s salary if they become ill or go on leave. 
• This type of hiring is a good way to test whether an employee is a good fit for your company for a longer period, without other obligations. At many temping agencies, you can take on the employee at no extra cost after 6 months.

Cons

• The temping agency usually decides which employee comes to work for you. So you do not know in advance what kind of person you will get.
• The employee can end the employment contract at any time, for any reason. That can cause scheduling problems.
• A temporary employee is more expensive. You pay not only the employee’s gross salary, but also the intermediary costs and coverage for the temporary agency’s employer risk. 

Secondment contract

If you are looking for an expert for a temporary job, you can hire an employee from another employer through a secondment agency (detacheringsagency). The employee remains employed by the other employer, but works under your supervision. This is called secondment (detachering).

A secondment agency mediates on your behalf between the supply and demand for staff. Their candidates are usually educated professionals in a variety of fields. 

Pros

• Secondment is a good option when you are looking for specific expertise for a temporary project. For example, when you are running a large building project, and you lack knowledge of building permits or regulations.
• The external employer or secondment agency bears the risks, such as sick leave or payment of termination compensation.
• The secondment agency will suggest a number of candidates. You can decide which one is the best fit for your company.
• Sometimes the secondment agency will recruit an employee especially for your assignment. If there is a good match, the secondment agency will hire the person to work on the assignment. That saves you time and administrative work.
• Secondment agencies have a large network, which can quickly help them arrange a high quality match. 

Cons

• A secondment contract is usually for a longer period. The secondment agency, the hiring organisation and the employee will agree on the end date and average number of working hours per week in advance.
• You can only end the contract with the secondment agency if it includes a notification period. 
• You will usually pay an hourly rate and a surcharge if you choose secondment. This rate will include the salary costs and premiums, as well as the costs for administration, recruitment and selection, and the risk of sick leave. 

Payroll agreement

Do you want to recruit an employee yourself who will only work for you? And do you want to limit the administration as much as possible? Then hiring a payroll employee is a good choice. 
In a payroll contract, the payroll company is the legal employer of the payroll workers. You are the client and can hire these employees for your own company. 

A payroll employee has at least the same employment conditions and legal status as an employee who is employed, according to the Wet Arbeidsmarkt in Balans (Labour Market in Balance Act, WAB, in Dutch)  If you have no staff, the same employment conditions apply as in the sector. For example, the number of holidays, a leave scheme, or a year-end bonus (dertiende maand).

Pros

• You can decide which employee comes to work for you. The employee may only take on assignments for another employer if you allow this. 
• You have less financial risk. For example, the payroll company is responsible for paying the employee if they are ill. This means you can look for a temporary replacement without extra costs. 
• You spend less time and money on administration. The payroll company takes care of payroll, absenteeism, levies, and dismissals. It also deals with wage payments, employment contracts, and pension accrual.
• You are not permanently tied to the employee. You can start on a temporary basis, and if you are satisfied with their performance you can extend the contract up to 3 times over a period of 3 years.

Cons

• You pay the payroll company for costs and the risk of illness.

• You are responsible for recruitment, agreeing on employment terms, and managing the employee

• If the payroll company does not pay the payroll taxes and VAT, then you are liable. You can cover part of this risk by applying for the liability exemption for hirers. You can do that via the Tax Administration’s disculpatie regeling (hirer’s liability, in Dutch).

• After 3 years, the employment contract automatically becomes a permanent contract and you cannot end the employment relationship without a good reason.