26th July 2023
The big news coming out of the Netherlands is that the government will likely introduce a recruitment agency licence in 2025 to combat shoddy practices by non-reputable players, particularly in the temporary staffing sector. Following years of complaints by those parties affected, the government has acted to ensure that EU workers not only receive the right amount of pay and are taxed correctly but that their accommodation is also of a suitable standard.
However now that the prime minister has handed in his notice to the King, the government can only deal with issues that are considered non-controversial. We will only know what will be classified as controversial (and therefore be put on hold until such time that there is a new government) in September.
As the implementation of licensing for recruitment agencies has a huge impact, the new legislation could very well be considered too controversial for this government to pursue. However, as the bill was welcomed in Parliament by parties across the political spectrum with overall support by a vast majority for calls to even extend the actual scope of the bill, it may still pass Parliament.
As such the new legislation may very well be implemented in 2025 as per the original timeline
Now, let’s examine these key compliance changes and how they will affect recruitment businesses placing contractors in the Netherlands.
As reported by global staffing and workforce solutions adviser, Staffing Industry Analysts (SIA), on their website, the 15,000 or so recruitment agencies currently operating in The Netherlands will need to be certified. Among the requirements is the need to “have a statement of good behaviour and pay a guarantee of €100,000”. Illegal activities such as providing sub-standard accommodation as well as wrongful salary and tax payments will be closely scrutinised. Those that don’t abide by the rules will have their licences revoked and won’t be able to trade again in The Netherlands again as a result.
The impact on temporary recruitment agencies in The Netherlands
The concept of a licencing system was first mooted by Dutch former socialist party leader, Emile Roemer, in a report published in 2020, which outlined recommendations to protect the rights of foreign workers. Only those agencies that adhere to the regulations around pay and accommodation will qualify for the licence – with spot checks to be carried out regularly to maintain standards. “It is too easy to set up a staffing agency and there are too many dodgy companies,” he said at the time. The requirement to hold a licence will apply to both Dutch and foreign recruitment businesses.
The Dutch government is clearly concerned at the poor treatment received by agency workers, migrants or otherwise. This is why they have decided to take action to safeguard the working rights of those employed under temporary contracts. Those businesses hiring temporary workers will not only need to comply with the rules, they will also be monitored regularly. As well as stumping up the €100,000 deposit, they must also be in possession of a certificate of good conduct (VOG) and their compliance with the licence obligations will fall under the remit of the Dutch Labour Inspectorate.
“Right to proper living and working conditions”
A recent story in DutchNews.nl highlighted several examples of the exploitation of seasonal foreign workers, in this case, Ukrainian refugees working in the horticultural sector. Some individuals were subject to illegal conditions such as the threat of deportation and having to pay fines if they complained about working conditions. Others did not know how much of their earnings were going towards accommodation and complained about late payment. Although refugees do not need a work permit, they must be registered with the country’s Employee Insurance Agency (UWV).
Indeed, in a letter to the House of Representatives, Social Affairs and Employment minister Karien van Gennip, echoed the sentiments of Roemer, adding that “too often foreign workers are treated like second-rate citizens”. She added, “Too many jobs agencies do not look after their workers properly and make them sleep and work in dire circumstances. That is not acceptable. People who come here to work have a right to proper living and working conditions, like you and me. That is why I am pleased that we are taking the steps towards a certification system for employment agencies.”
The new licence, assuming it goes ahead is an important development that is bound to have widespread ramifications across the EU. The rights of EU contractors and temp workers, including pay and accommodation, must meet the standards set out by the Dutch government. For global recruiters placing contractors abroad, this upcoming legislation stresses the need to comply with all local worker regulations or pay significant penalties.
. Should you need any advice about the licence or any other compliance matter, speak to our 6CATSPRO experts.
Listen to what our Dutch compliance expert has to say
The full details about the licence in The Netherlands have yet to be released by the Dutch government. We will of course keep you updated with all the latest development and important information as and when we have it. In the meantime, you can listen to Ronald Vermeulen, our resident Dutch compliance specialist, who covers all the key points as they stand in the video below.
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