In the Netherlands, recruitment agencies operate under distinct labour laws when engaging employed workers and independent contractors. Employed workers enjoy benefits like legal protections and pension contributions, while independent contractors often have greater autonomy.
Much like the rest of the world, the recruitment landscape in the Netherlands has been impacted by the rise in independent contractors. The number of freelancers working in the Netherlands has risen by 85% over the last decade, with 1.6 million people working as freelancers in January 2024.
To ensure compliance and fairness, the Dutch government is introducing stricter regulations and enforcement measures, focusing on low-paid foreign workers. These changes will significantly impact both Dutch and international businesses engaged in recruitment in the Netherlands.
This blog explores new legislation updates that will impact recruitment firms operating in the Netherlands, including an incoming licensing requirement for agencies.
Disclaimer: The information provided here does not, and is not intended to, constitute legal advice. Instead, the information and content available are for general informational purposes only.
Licensing for Recruitment Agencies in the Netherlands
One of the biggest changes to the recruitment landscape in the Netherlands is the upcoming introduction of licensing requirements for both Dutch and foreign staffing agencies.
This legislation will aim to combat sub-standard practices by non-reputable parties, particularly in the temporary staffing sector. The change will ensure that EU workers not only receive the right amount of pay and are taxed correctly but that their accommodation is also of a standard that meets the requirements of the Dutch government.
Among the requirements is the need to have a certificate of conduct and pay a guarantee of €100,000. Unlawful activities such as providing inadequate accommodation, or wrongful salary will be closely scrutinised. Those who don’t abide by the rules will subsequently have their licenses revoked and won’t be able to trade in the Netherlands again.
Companies who use the services of recruitment agencies will have to ensure that they work only with licensed service providers or risk paying a fine of up to €90,000.
However, this licensing requirement for businesses conducting recruitment in the Netherlands has been delayed. Initially planned for 1st January 2025, the Ministry of Social Affairs will announce a new implementation date in January 2025.
Why has the Licensing for Recruitment Agencies in the Netherlands Been Delayed?
The reason for this new delay is that at present it is still unclear which organisation will handle the following key responsibilities including;
-
- Issuing Licenses
- Granting Relief
- Appointment of Auditors
- Guarantees Management
For further details on those above, visit the Netherlands Ministry of Social Affairs and Employment.
Dienst Justis, a screening authority that assesses the reliability of individuals and organisations in the Netherlands will only partly be able to fulfill this role. Therefore, the government is now researching the possibility of bringing the enforcement in-house with the Ministry of Social Affairs.
In this case, a delay doesn’t mean the plan is being cancelled. There is strong cross-party support within Parliament to address abuse and exploitation within recruitment in the Netherlands. This makes it clear that licensing will eventually be implemented. When it happens, being prepared will be essential.
The VBAR Act and Its Impact on Recruitment in the Netherlands
What is the VBAR Act?
For businesses conducting recruitment in the Netherlands, the VBAR Act (‘Wet Verduidelijking en Beheersing Arbeidsrelaties’), or the ‘Bill Clarifying Assessment of Employment Relations and Legal Presumption’ is a significant upcoming change.
Set to take effect in 2026, this law aims to explain the rules around working relationships between independent contractors and clients to tackle deemed employment.
The bill introduces two additions to current legislation:
- Clarification of “relationship of authority”, which is one of the defining elements of an employment agreement
- A legal presumption that an employment agreement exists when working at an hourly rate of €33 or less.
How VBAR Defines Employment vs Independent Contractors in the Netherlands
The act establishes criteria to determine the status of a worker, whether they are classified as an independent contractor or employee. These criteria have been established in Dutch and EU case law over many years.
- Receiving instructions on work content
- Work being monitored
- Organisational embedding of the worker
- Working on a structural basis
- Performing the same work as "regular" employees
- Bearing your own financial risk
- Bringing your own tools or equipment to work
- Having specific expertise which is not available in the work provider's company
- Working independently and for a short period of time
The conditions for self-employment are referred to as "working at one's own risk and expense" within the working relationship (also referred to as: "personal entrepreneurship").
Personal entrepreneurship can be considered when the criteria for employment and independence balance each other out. Aspects to consider are:
- Multiple clients
- Investments of some substance
- Registration with the Chamber of Commerce
- VAT registration
- Entitlement to tax credits for entrepreneurs
Legal Presumption of Employment
The act also sets a “legal presumption of employment” based on an hourly rate. If an individual is hired for less than €33 per hour, they can claim employment rights. This legal presumption exists to help vulnerable low-paid workers to more easily claim legal status as employees and enjoy the rights and protection to which they are consequently entitled.
As a result, these workers can claim employment rights such as:
- Paid holiday
- Sick pay
- Pension
In anticipation of this new legislation, from January 2025 onwards the Dutch authorities will start enhanced policing of deemed employment. Should independent contractors be working under circumstances that are no different from an employee the client will not only be liable for tax and social security contributions but will also face fines.
It is the burden of the recruitment firm to ensure they can prove genuine contractor relationships or risk reclassification of workers as employees, leading to added obligations such as pensions, paid leave, and social security contributions.
Partnering with an Employer of Record in the Netherlands can help guide you in ensuring your contractors are genuinely independent.
Stay Compliant in the Netherlands Recruitment Market for 2025
If your agency actively engages contractors, these legal updates could redefine how you approach recruitment in the Netherlands.
Navigating the complexities of payroll and compliance for contractors in the Netherlands can be a challenge for recruitment agencies expanding globally. However, with the right expertise and partnership, it becomes a smooth and efficient process.
That’s where Workwell Global makes it work for you. We specialise in helping recruitment agencies expand into new markets seamlessly. Our team provides expert guidance in areas such as payroll management and worker classification, allowing you to focus on placing talent while we handle the administrative and regulatory requirements.
Talk to our experts to find out how you can compliantly hire talent, wherever in the world they are.