Mandatory certification for temporary employment agencies and secondment agencies
On 11 November, the Senate passed the Labour Supply Act (Wtta). The Wtta will radically change the playing field for secondment agencies and hirers. In this blog, we, as employment lawyers, outline the most important changes for you. What is the purpose of the Act, what will change for you as a temporary employment agency or hirer, when will the Act come into force and what penalties can you expect for non-compliance?
Purpose of the Act
The purpose of this Act is to protect workers who are employed through temporary employment agencies. In particular, the Act aims to protect migrant workers from exploitation. Abuses such as underpayment, poor housing and evasion of social and tax obligations are curbed by this law. However, the law applies to all companies that provide personnel, including temporary employment agencies and secondment agencies for highly skilled personnel.
The Act introduces a mandatory certification system: only certified temporary employment agencies may supply workers, and hirers may only do business with certified temporary employment agencies.
New obligations
Certification requirement
Suppliers may only supply workers if they have a certificate. This certificate can be applied for at a designated institution and is valid for four years. Periodic checks by inspection bodies are mandatory.
Administration and reporting obligation
Lenders and hirers must keep accurate records of which workers are made available and where, and this must be reported in writing in advance.
Certificate of good conduct requirement
Every lender must submit a certificate of good conduct (VOG) when applying for and retaining the certificate. This applies to the company as well as to directors, partners, associates or managers. The VOG may not be older than three months when submitted. A new VOG must be submitted when there is a change of directors.
Bank guarantee
In addition, the lender must provide a bank guarantee as financial security. The standard amount for this will be €100,000; for new lenders, a reduced amount of €50,000 applies to the provisional certificate. The bank guarantee can be called upon in the event of, for example, outstanding wages or outstanding debts to the tax authorities.
Exception: less than 10% of the wage bill
There is an exception for lenders for whom the provision of workers is a minor part of their total business activities. If, in the year prior to the inspection, less than 10% of the total wage bill was paid to workers provided, the company does not need to provide a bank guarantee. This check is carried out at the time of application and during periodic inspections.
Prohibition on hiring from non-certified suppliers
Hiring companies may only hire workers from certified suppliers. You can check this via a public register.
Chain responsibility
In the case of temporary employment arrangements, all parties are also responsible for ensuring that they only work with certified temporary employment agencies.
Entry into force
The law will come into force on 1 January 2027. Companies that wish to continue to hire out workers must register with the Dutch Temporary Employment Market Authority (NAU) before that date. On 1 January 2028, the Dutch Labour Inspectorate will start enforcing the law. Lenders operating on the labour market without authorisation will be fined. This fine also applies to hirers who use temporary employment agencies or secondment agencies.
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