Obligations for secondment to the Netherlands
Obligations for secondment to the Netherlands
In addition to potential financial consequences relating to payroll taxes and compulsory social security premiums in the Netherlands, conditions concerning employment conditions apply in respect of temporary secondment of foreign employees in the Netherlands. Even if the employment contract with the relevant worker is governed by foreign law! This is also due to international agreements that the European member states concluded to protect seconded employees. In the Netherlands, this European Directive was implemented through the Employment Conditions of Seconded Employees in the European Union Act (WagwEU).
In which situations do these obligations apply?
The WagwEU applies to the following three forms of secondment of foreign employees in the Netherlands:
- Pure service provision (a foreign service provider executes an order with its own foreign personnel for a client in the Netherlands, under the service provider’s direct management and supervision and at its own risk and expense).
- Secondment within multinational concerns (an employee of a subsidiary in one member state is seconded to an employee of a Dutch subsidiary within the same group).
- Temporary agency work (deployment of temporary agency workers of a foreign temporary work agency for work in the Netherlands).
Minimal employment conditions for seconded employees
- minimum wage
- maximum work times and minimum rest times
- health, safety and hygiene at work
- gender equality
- minimum holiday entitlement
- conditions for deployment of employees by temporary work agencies
The European rules governing this subject were recently updated. These changes were not yet implemented in Dutch secondment legislation. The current Dutch rules are based on the principle that the law of the member state sending the workers remains applicable, with the exception of certain ‘minimum employment conditions’ as set out above. The new regulations are based on the concept that employees in the assignment country should have the same salary and employment conditions as the other employees. This naturally extends far beyond just minimum wages.
When the secondment lasts longer than 12 months, the entire employment law system of the assignment country applies.
What administrative obligations apply for secondment?
A file should be available in the workplace, containing at least the following:
- Employment agreement
- Pay slip
- Number of hours worked
- Evidence of the wage paid out to the employee
- Evidence for social security contributions (A1)
- Other matters in the context of the legal information duty of an employer. This refers to matters such as the name of the parties, the place of work, the job title, holiday, wage, contractual working hours, pension, CLA, etc.)
Proof of identity of:
- Client in the Netherlands (the person/entity where the seconded employees are working on site)
- The person responsible for payment of wages
The file may also be available from the workplace in a digital format.
Also a sole trader or self-employed person subject to the disclosure requirement set out below should have documents available in the workplace that prove his identity, the identity of the client in the Netherlands, and the identity of the person in charge of wage payment.
The employer will be subject to a disclosure requirement (in writing or in electronic format), under which the employer is required to disclose various information to a Dutch institution before commencement of the activities. This will concern issues such as the identity of the person/party performing the services, the party receiving the services, seconded employees, the contact, the duration of the work, the address of the workplace and the social security contribution. For the time being, no disclosure system has been introduced in the Netherlands. Take into consideration that as soon this is introduced, fines may be imposed for infringement on the disclosure requirement.
Please note, this disclosure requirement also applies to sole traders and self-employed persons that work in some sectors. It appears that the requirement will apply for the construction, cleaning, healthcare and IT sectors.
Fines may run up to a high amount, up to € 20,250 per infringement, increased by up to a maximum of 200% for repeated or excessive non-compliance. Inspectorates in various EU member states may also exchange information. So, take care to avoid unpleasant surprises during inspection. This also applies to sole traders and self-employed persons!
We are happy to assist you
Inventory of consequences
Before seconding employees to the Netherlands, we would like to outline the consequences for you. We will make a list of the obligations that apply to you in the Netherlands relating to:
- social insurance
- employment law and minimum employment conditions
- corporate income tax, profit tax and VAT
- other issues such as registration, including in the Commercial Register.
Registration, administration & documents
We provide the completion of your registration with the authorities and the associated (administrative) documents (A1 declaration, tax returns etc.).
Subsequently, we will ensure that you comply with the administrative requirements set out in the top section of this page. We do this both at the start and during the project:
- by helping you compile and update the required case file
- by acting as your representative vis-à-vis the authorities
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Since 1972, Interfisc has offered international HR & Payroll solutions in the Netherlands, Belgium, Germany, France, the United Kingdom, and Italy. We do this from our offices in the Netherlands and Belgium, and with an international team of around 45 committed and caring employees.
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