The Act on Working Conditions of Posted Workers in the European Union Act (WagwEU) applies to employers from EU countries who temporarily post its employees to the Netherlands to provide cross-border services.
Obligations apply to the company in the other EU Member State (the service provider) and the company established in the Netherlands (service recipient) to which these employees are posted. Fines can be imposed for non-compliance with these obligations. It is therefore important that you are well aware of these obligations.
The most far-reaching is without a doubt the obligation to report for the service provider. The duty to report means that the service provider must report all kinds of data to the Netherlands Social Insurance Bank (SVB) via the online portal. Non-compliance with this can be fined by the Netherlands Labour Authority.
The company in the Netherlands being recipient of services in the Netherlands, will in practice have to assist a lot with the online notification, because the foreign employer may not familiar with the Netherlands authorities. It is therefore important that you are well aware of the obligations arising from the WagwEU. Below you will find a summary.
First of all, the WagwEU contains a core of employment conditions to which the foreign workers that are posted to the Netherlands are entitled. It does not matter what is stated in their employment contract. Those rights include:
- the right to minimum wage (including overtime allowances)
- the minimum number of paid vacation days
- health, safety and hygiene at work
- sufficient rest periods
- equal treatment of men and women
If the foreign worker starts working in a sector in which a collective labour agreement is applicable with more favorable conditions, the employment conditions from this collective agreement will apply. Penalties can be imposed if the working conditions are not compliant with the labour laws.
Based on the WagwEU, the employer established abroad who posts the employees to a company in The Netherlands must comply with a number of administrative obligations.
- Information duty This concerns the obligation of the foreign employer to provide information to the SVB that is necessary for the implementation of the WagwEU. For example, the service provider must be able to provide information about the nature of the work being performed.
- Administration obligation This obligation means that the foreign employer must have certain documents such as passport, pay slips, working hours overviews, proof of payment, employment contracts and proof that social security contributions have been paid in the country of origin (Certificate of Coverage, A1 statement) available in writing or electronically at the workplace in the Netherlands.
- Obligation to designate contact person This obligation means that the service provider is obliged to designate a contact person in the Netherlands who can approach by the Netherlands Labour Authority and act as a point of contact. This can also be a contact person of the company in The Netherlands (service recipient).
In addition to the aforementioned administrative obligations, the EU service provider also has a reporting obligation. This is the most far-reaching obligation. This duty includes:
- prior to the secondment, the service provider must provide the SVB with certain data (such as the identity of the employee, the service provider and the nature and duration of the work) via the online portal.
Certain industries are be exempted from the notification obligation because they would place a disproportionate burden on the industry, e.g.:
- passenger and freight transport (except cabotage activities) will probably be excluded.
- In addition, there is an an exception for small service providers from, for example, border regions who regularly provide a service in the Netherlands. An example is mentioned of a German window cleaner who regularly cleans the windows in the Netherlands. A reporting obligation will probably be introduced for this group, which will be valid for 1 year.
The company established in the Netherlands where the work is performed by the foreign employees, has an audit obligation (duty to verify). This condition is introduced with the idea of tracing rogue foreign employers who do not want to make themselves known to the Netherlands Labour Authority. The duty to verify means that the employer in the Netherlands must check the accuracy of the notification from the foreign employer via the online portal.
- The foreign employer reports the cross-border provision of services within the EU via the online portal.
- The service recipient in the Netherlands must check, no later than five days after the start of the work, whether the online notification is made and whether the foreign employees who are being seconded matches the persons specified in the online notification.
- In addition, the company in the Netherlands must check whether the nature and duration of the work and the work address specified by the EU service provider is correct. The service recipient must report any inaccuracies in the online notification made to the SVB.
If the company in the Netherlands has reported a missing or incorrect report by the service provider, the company in the Netherlands is exempted from sanctions.
A fine will be imposed on the EU service provider for non-compliance with the reporting obligation and the obligation to keep records. A fine can be imposed for various types of violations. These can be imposed separately from each other. The total fine can therefore be considerable. The administrative fines vary from € 1,500 to € 8,000 per violation or per employee, but can be moderated or increased under certain circumstances. A fine of € 1,500 will be imposed for non-compliance with the duty to verify by the company (service recipient) established in the Netherlands. Here you can find all the fines for the various violations.
The administrative fines that are imposed by the Netherlands Labour Authority can be collected in the other EU member states. This means that a foreign employer can also be held liable for payment of a fine by a government body from another EU Member State.