Within the EU we have the freedom to provide cross-border services. Employers, however, should always respect the mandatory rights, working conditions and health and safety rules of the EU. In June 2016 the EU Posted Workers Enforcement Directive came into force, and as a result, employers have additional obligations with respect to employees working across borders in the EU. One of these is the need to file a notification of the posting of an employee to another EU country. On 1 March 2020, the Netherlands launched a system whereby notification can be given of the posting of EU employees working within the Netherlands and as of that date the notification obligation will be enforced. This article gives an overview of what the Posted Workers Directive entails from a Dutch perspective, what you can expect when sending an employee to work in the Netherlands, and what you need to keep in mind to ensure your company is compliant with the Dutch legislation.
WHAT IS the objective of the Posted Worker directive?
The EU strives for “equal pay for equal work”. It has therefore introduced some employment terms to be applied to posted workers. These employment terms establish that posted workers are entitled to a set of core rights in the host Member State.
This set of rights consists of:
- minimum pay;
- maximum work periods and minimum rest periods;
- minimum paid annual leave;
- conditions for hiring out workers through temporary work agencies;
- health, safety and hygiene at work;
- equal treatment of men and women.
As of 30 July 2020 the following changes will become effective and will affect international assignments:
- the entitlement of posted workers to all mandatory elements of remuneration (instead of “minimum pay”);
- the entitlement of posted workers to the same levels of accommodation, allowances and reimbursement of expenses as local employees;
- for long-term postings (longer than 12 or 18 months), entitlement to an extended set of employment terms of the host Member State.
It is advisable to update your assignment and business travel policies to ensure that intra-EU postings comply with the new directive and meet the requirements for local standards in wages and working conditions.
In order to ensure that the Posted Workers Directive will be implemented and enforced, the Posted Workers Enforcement Directive has been adopted as per June 2016. This Directive imposes a set of strict practical requirements to track the overseas postings by employers. Non-compliance may result in (high) penalties for the employer.
WHAT IS a posted worker?
A posted worker is an employee who is sent by his employer to carry out a service in an EU Member State other than the State in which he or she normally works. The posted worker performs services/activities in the other Member State on a temporary basis and will not integrate into the local labour market. Someone working in the context of a contract of services, an intra-group posting or a hiring out through a temporary agency can be considered as a posted worker as well.
do you need to notify all cases?
In the Netherlands, the duty to notify applies effectively as of March 1, 2020. For temporary postings that start before 1 March, 2020, no notification has to be done. In some cases there are exceptions to the duty to notify.
The following is a non-exhaustive list of activities which are excluded from the duty to notify:
- Attending business meetings in the Netherlands or employees who enter into agreements with companies or institutions in the Netherlands, if the stay does not exceed 13 consecutive weeks within a period of 52 weeks
- Employees (qualified or specialised) who carry out the initial assembly or first installation of a good, provided that the services are a significant part of the provision of the goods, are necessary for the proper functioning of the good and the services needed do not exceed 8 days. The construction sector cannot apply this exemption;
- Urgent maintenance or repairs to machinery or equipment, which has been provided by the service provider to the service recipient, or the installation or amendment of software provided by the service provider who provides instructions regarding the use of the software, provided that their attendance is required for these activities and does not exceed 12 consecutive weeks within a period of 36 weeks.
 In other legislation a total of 13 weeks within a period of 52 weeks is used (not consecutive). Hopefully this is meant here as well and as such an adjustment to the legislation will be made.
what should be notified?
A foreign employer can notify in the Netherlands through the online notification portal. The notification should be made before the employee starts to work in the Netherlands. As an employer abroad (or self-employed person), you should notify the following:
- the identity of the person submitting the notification;
- the details of the foreign company;
- the contact person in the Netherlands;
- the details of the client (the service recipient);
- the sector in which activities will be performed in the Netherlands;
- the address/place where the activities will be performed;
- the expected duration of the work;
- the identity of the person responsible for payment of salary/wages;
- the identity of the employee(s) providing the service;
- the presence of an A1 certificate or other type of evidence that proves that social security contributions are paid for the company and its employee(s) in the country of origin.
What are the most important things to keep in mind?
Despite the fact that we have the freedom to provide cross-border services within the EU, it is important to track cross-border movements within your company to make sure you act in line with the Posted Workers Directive and the Posted Workers Enforcement Directive.
In addition, update your assignment and business travel policies so they are in line with the new Directive coming into effect from 30 July 2020.
Implement solid processes and make sure you verify that each notification has been done. Even though this is an obligation for the foreign (posting) company, you are still responsible for verifying that it has been done in order to be fully compliant and to prevent penalties.