On 3 June 2016, the Dutch Upper House adopted the bill for the Act on Employment Conditions for Posted Workers in the EU. The Act implements the European Enforcement Directive and aims to improve the protection of posted workers. The date of entry into force is still unknown, but the Act must be transposed in the Netherlands before 28 June 2016. Below is an overview of the most important measures:
Notification and documentation requirement
There will be a notification requirement for service providers from another Member State who temporarily post workers in the Netherlands. Because of this notification requirement, the Social Affairs and Employment Inspectorate (SZW) will be able to verify that the core set of employment conditions are complied with and so-called mailbox companies can be identified (see below). The notification can be done digitally. It is expected that the digital notification system will be ready by
1 January 2018.
Service providers must report the following information to the Minister of Social Affairs and Employment:
- the identity of the service provider, the service recipient and the worker;
- a designated contact person;
- the identity of the person who is responsible for payment of wages;
- the nature and probable duration of the work;
- the address of the place of work; and
- the contribution for the applicable social security schemes.
Passenger and freight transport, except cabotage operations, will be exempted from the notification requirement. There will also be an Order in Council which will stipulate that small service providers in (for example) border regions who carry out services in the Netherlands on a regular basis only have to provide a notification once a year.
Finally, during performance of the service, the service provider must make a number of paper or digital documents available in the workplace, such as copies of employment contracts, payslips, working hours statements and proof of payment of wages.
Duty of verification
The service provider must provide the service recipient with a written or electronic copy of the notification prior to the start of the work. The service recipient must verify the notification and report any inaccuracies to the Minister of Social Affairs and Employment.
Failure to comply with the notification requirement can lead to an administrative penalty of up to € 20,250. In the event of a repeated infringement, the penalty may be increased. Both the service provider and the service recipient can be fined. Service recipients who notify the Minister of Social Affairs and Employment of a missing or incorrect notification will be safeguarded against sanctions, although the service can still be carried out.
Core set of employment conditions
Workers who are temporarily posted to another EU country are entitled to a core set of employment conditions (such as maximum working hours and minimum rest period and minimum wages). The new Act clarifies, in particular, which pay components belong to the minimum wage. These include for example, payments for overtime, holidays allowances, shift allowances, interim wage increases and other costs which are necessary for the performance of the function. Additionally, the Act also determines that certain entitlements regarding social security benefits and occupational pension schemes as well as expenses relating to the posting (such as additional costs for double accommodation and travel costs between country of residence and country of employment) should be paid on top of the minimum wage. The government will publish on a website the core set of employment conditions, as laid down in the Act and/or generally binding Collective Labour Agreements (CAO).
The Act is applicable to the following forms of cross-border posting:
- Straightforward service-provision: a service provider from one Member State carries out a service with workers under its own management and supervision and for its own account in another Member State;
- Intra-group posting: an employee of a branch of a company in one Member State is posted to a branch of the same company in another Member State.
- Temporary agency work: a temporary agency worker is made available in a Member State other than where the temporary-work agency is located (in this case, management and supervision are performed by the service recipient).
Recognising workers falsely declared as self-employed
There will be an Order in Council which will include the characteristics of a 'real' posting. This will make it easier for the Social Affairs and Employment Inspectorate to identify mailbox companies and bogus self-employment. Failure to comply with one of the characteristics does not automatically mean that there is no posting within the meaning of the Posting of Workers Directive. However, it may be reason for the Social Affairs and Employment Inspectorate to investigate.