Do you work with staff from abroad?
Please note the conditions!

The European Posted Workers Directive was revised in 2020. Legislation has also changed in the Netherlands regarding obligations for foreign employers and for Dutch clients who are hiring. The reporting requirement of the Posted Workers Directive came into force on 1 March 2020. This requires foreign employers to file an online report when their staff temporarily perform work in the Netherlands. In addition, from 30 July 2020, the minimum employment conditions for staff working temporarily in the Netherlands have been made much stricter. This article provides you with information about what additional obligations you have as a foreign employer or as a hiring Dutch client as a result of the revised Posted Workers Directive.

Why was the reporting requirement introduced?

The Dutch Terms of Employment for Posted Workers in the EU Act (WagwEU) protects posted workers and combats unfair competition based on working conditions. These European rules aim to maintain a minimum standard of working conditions for workers working within the EU.

In which cases should a report be made?

Posted workers in the Netherlands need to be reported online via the online portal Posted Workers since 30 July 2020. In this context, a posted worker is an employee who temporarily performs work in the Netherlands for their employment with an employer from the European Economic Area (EEA) or from Switzerland. In the WagwEU, the following situations lead to a reporting requirement:

1. The temporary performance by a worker of work in the Netherlands for another party (service recipient), under the direction and supervision of their foreign employer (service provider).
2. The intra-company loan of staff, where the foreign worker temporarily performs work in the Netherlands.
3. The loan of a worker by a foreign employer or by a posting agency to a hirer, for which the worker temporarily performs work in the Netherlands.
4. Temporary work in the Netherlands by a self-employed person without staff who usually works outside the Netherlands is also covered by the reporting requirement.

The reporting requirement only applies to work starting from 1 March 2020. This means that a posting that started in February 2020, for example, is not yet subject to the reporting requirement. The reporting requirement does apply if you extend or have extended the posting after 1 March 2020.

Who makes the report?

The service provider (the foreign employer, the posting agency or the self-employed person subject to the reporting requirement) is always the party reporting the work via the Posted Workers portal. The report includes information about the service provider. This includes information such as which sector the service provider operates in, the contact in the Netherlands for the service provider, the service recipient and the identity of the posted worker. After the report has been made, the service recipient will receive a notice to this effect. The service recipient must check the report within five days and reject it if it is incorrect and/or incomplete.

Documentation requirement

Besides reporting the posted worker, the service provider must ensure that certain documents are digitally available or physically present at the worker’s workplace. They include the following documents:

• An A1 declaration indicating where a worker is socially insured.
• The employment contract.
• Payslips and proof of salary payment.
• A schedule of working hours.
• A summary of key employment information.

Fines for failure to report, incorrect or late reporting

From 30 July 2020, the service provider must report posted workers online. The Dutch government also hands out fines if you as an employer or client do not comply with the obligations. In the Netherlands, you can be fined for the following three offences:

1. Failure to report or late reporting.
   The fine amounts to €1,500 for up to 10 workers, €3,000 for up to 20 workers and €4,500 from 20 workers onwards.
2. Not having the required documents available.
   The fine amounts to €8,000 in total.
3. Failure to verify notification by the service receiver.
   The fine amounts to €1,500.

In addition, the service provider is obliged to provide additional data and information if requested to do so. If the service provider fails to provide the data and information (on time), the service provider may be subject to an additional fine.

Working conditions for the incoming worker

The WagwEU protects posted workers and combats unfair competition based on working conditions. Workers posted to the Netherlands for up to 12 months (a run-out to 18 months in special circumstances) are entitled to the ‘hard core’ of employment conditions. They are the main terms and conditions of employment prescribed by Dutch law. Minimum wage, gender equality and safe working conditions, for example, are among these main terms and conditions of employment. If a posted worker works in the Netherlands for more than 12 months, all Dutch terms and conditions of employment apply to this worker.

With the revision of the Posted Workers Directive, main terms and conditions of employment have been extended for workers posted to the Netherlands. Conditions for accommodation and for reimbursement of expenses for travel, meals, and accommodation have been added to the main terms and conditions of employment. For example, the employer must reimburse expenses directly related to the posting in accordance with the national law of the home country. If the employer not clearly demonstrate what the supplement applies to, the whole supplement is considered as reimbursement of costs related to the posting and the supplement is not part of the minimum wage.

If a foreign worker works in a sector covered by a collective agreement declared generally binding, with terms and conditions more favourable than the main terms and conditions of employment, the worker will be subject to the terms and conditions of employment under this collective agreement from the first working day in the Netherlands.

Reporting requirement for international transport companies

The reporting requirement also applies to certain self-employed entrepreneurs, such as self-employed drivers. Foreign employers have a reporting requirement for their drivers. Foreign road transport employers can also submit a posting declaration in the ‘European portal for freight and passenger transport for cabotage or third-country transport’ since 2 February 2022. This option applies to all transport companies that have workers perform transport in the Netherlands, cabotage or third-country transport on the basis of a transport contract. If this option is used, the foreign employer no longer needs to submit an annual declaration in the online portal Posted Workers. The legislation regarding the specific situations where transport companies have to report is complex. We therefore recommend that you contact our Global Mobility specialists in such cases.

Non-EU employer: work permit instead of reporting requirement

The WagwEU only applies to workers from the EEA and Switzerland. For workers from countries outside here, you will need a work permit. There are two types of permits: an employment permit and the combined residence and work permit. For workers outside the EEA and Switzerland, the Dutch Employee Insurance Agency (UWV) only issues work permits under strict conditions. One of these conditions is that you have not been able to find a worker in the EU who can do the job.

Different rules apply to certain groups of workers from outside the EEA and Switzerland. These include highly skilled migrants coming to the Netherlands to contribute to the knowledge economy, researchers and trainees.

In this article, we will not discuss in detail all the conditions a migrant worker must fulfil to qualify for a work permit and the exceptions that may apply. We are, however, of course happy to help you think through your options based on your specific situation.

Conclusion

If you deal with staff from another European country who are temporarily working in the Netherlands, you will probably also be faced with (new) obligations under the WagwEU. Failure to comply with these obligations could mean you have to pay several fines.