Compulsory registration
Every company or legal entity that provides workers in the Netherlands must register this activity in the Commercial Register of the Chamber of Commerce. It makes no difference whether the company is based in the Netherlands or abroad, so the change in legislation also applies to foreign organisations. Among those affected are temping agencies, employment agencies, payroll companies and jobs pools based outside the Netherlands but active in the Netherlands. All of these companies must register in the Commercial Register.
Provision of workers
The law applies to companies that provide workers as part of their normal business activities as well as to companies that do so incidentally – meaning this activity is not part of the company’s day-to-day activities. The law uses the following definition for the provision of workers: ‘the provision of workers to another party on a paid basis for the performance of work under the supervision or management of the said party, other than by virtue of an employment contract concluded with the said party’.
In concrete terms, there are three important elements:
- One company is providing workers to another company.
- The company providing workers receives a corresponding payment from the company to which the workers are provided.
- Workers who have been provided work under the supervision and direction of the company to which they are provided.
Large fines
The change in legislation is an initiative of the Department of Employment and Social Affairs, with the amendment to the Placement of Personnel by Intermediaries Act (WAADI: Wet allocatie arbeidskrachten door intermediairs) forming part of its efforts to counteract illegal labour and worker exploitation. It is also designed to allow the government to better monitor worker provision practices in the Netherlands, thus forming part of fraud prevention measures. Violations of the law will result in large fines from the Employment and Social Affairs Inspectorate of € 12,000 per worker. Repeated violations will result in higher fines of € 24,000 and € 36,000 per worker.
Recipients
The law also affects all companies that hire in staff, known as recipients. Companies that use temporary staff are no longer permitted to use the services of agencies that are not properly registered. Recipient companies can consult www.kvk.nl/waadi to check if agencies are registered on the Chamber of Commerce website. They can do this simply by entering their Chamber of Commerce number, which is assigned to all companies and legal entities upon registration in the Handelsregister. In the event of a violation of the law, both the agency and the recipient will be fined by the Employment and Social Affairs Inspectorate.