The Dutch government is determined to change the experience of foreign workers in the country and combat questionable practices of unscrupulous players in the employment market, especially in the temporary staffing sector. With this aim, the Netherlands is all set to introduce a recruitment agency licence, which is expected to come into force in 2025.
The Need for a Licence
The Netherlands has so far had a relatively straightforward process for anyone wanting to set up a recruitment firm. However, years of complaints regarding illegal practices, substandard pay, poor working conditions, and intimidation have forced the government to act to prevent the exploitation of employees, particularly those coming into the country from overseas. For instance, reports reveal that following the Russia-Ukraine conflict, the proportion of Ukrainian refugees being exploited has significantly increased in the country.
Karien van Gennip, the Dutch Minister for Social Affairs and Employment, has gone so far as to state that foreign workers must not be treated like “second-rate citizens.”
The recommendation for a licence was made for the first time by socialist party member, Emile Roemer in 2020, to protect foreign workers, and has been in discussions since then. The latest update, as of November 2023, is that the government will start issuing the licence for staffing businesses from January 2024 and mandate its requirement by 2025, giving recruitment agencies 12 months to procure the licence.
The legislation intends to solve the issues surrounding migrant workers, most of whom are temporary. It also aims to help create uniform opportunities for all users of leased labour and staffing agencies.
What Does the Licence Entail?
The licence was initially expected to be an extension of the WAADI (Dutch Workers Allocation by Intermediaries Act) legislation. However, it is a separate licence with WAADI and NEN-4400 certifications as prerequisites. NEN-4400, established by the Nederlands Normalisatie Instituut (NEN), is a national standard required that all businesses and work contractors (including subcontractors) need to adhere to with registered offices in the Netherlands.
The compliance obligations fall under the purview of the Dutch Labour Inspectorate. The agencies will need to deposit €100,000 and will be monitored regularly. They will also need to a certificate of good conduct (VOG) to hold the licence. Additionally, only the agencies that follow the salary provisions and accommodation standards will be eligible for the licence.
Simultaneously, Dutch and foreign clients who use the services of staffing agencies will have to ensure that they work only with licensed service providers or be liable to pay up to €90,000 as a fine.
The licence is expected to have widespread ramifications for workers across the EU. Contractors and temp workers from the EU will be paid and provided accommodation according to the new standards. Plus, the offered accommodation must be approved by the Dutch government. In addition, global recruiters will have to comply with all local worker regulations.
Although the complete details are yet to be released, the law will include regulations for salary and taxation with provisions to penalise wrongful attempts of recruiters through scrutiny. Spot checks and vigilant oversight will be top priorities to prevent the exploitation of workers. A provision for revoking the licences of defaulters is also expected to be a part of the new law.
With tightening regulatory oversight and increasingly complex compliance requirements, ensuring compliant recruitment in the Netherlands can be challenging. At Access Financial, we closely monitor legislative changes in the Netherlands. We await further information or clarifications from Dutch authorities and will keep you updated.