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Action to be taken regarding employee secondment abroad

26 feb 2020

Action needs to be taken if you post staff from another EU Member State or if you have seconded a member of staff to a company in another EU Member State. The same also applies when posting a member of staff to a branch office in another EU Member State. We will now focus on the reporting requirement that will soon come into force.  Firstly, I will deal with the new Directive and the existing obligations, which are often insufficiently acknowledged. A summary is provided at the end of the text.

Aspects of employment law are addressed. Fiscal legislation, which is relevant, is not taken into consideration in this text. This document is intended as an overview and is not exhaustive.

EU Posting of Workers Directive

The EU Posting of Workers Directive came into force on 18 June 2016. The Directive was required to be transposed into national law by all EU Member States. The objective is to ensure that workers receive fair compensation and to protect against unfair competition and exploitation. Seconded workers are entitled to partial protection under Dutch employment legislation.

The EU Posting of Workers Directive focuses on secondment to all EU Member States and to Norway, Liechtenstein and Iceland.Three posting categories are recognised:

  1. Full posting: an employer in a EU Member State performs an assignment in another EU Member State, by posting a number of members of staff.
  2. Multinational company posting: an employee who works for a company in a EU Member State is posted to a company that belongs to the same corporate group in a different EU Member State.
  3. Posting: a company employee in a EU Member State is posted to a different company in a different EU Member State.

The EU Posting of Workers Directive includes fundamental core working conditions, to which employees seconded to the Netherlands are entitled. The sourcing country’s employment legislation is not relevant. The Directive applies in all cases, for example if German employment legislation is applicable. The country where social security contributions are due for the employee is also irrelevant. Working conditions are provided for in the following legislation:

  • The Wet minimumloon en vakantiebijslag (Minimum wage and holiday entitlement law) regulates minimum wage and holiday entitlement (including compensation for overtime work), as well as the minimum number of paid days of leave.
  • The Arbeidstijdenwet (Working Hours Act) regulates maximum working hours and minimum breaktime.
  • The Arbeidsomstandighedenwet (Working Conditions Act) regulates occupational health and safety (including hygiene).
  • Algemene wet gelijke behandeling (Equal Treatment Act)

When an employee from abroad is posted to a sector with a universally applicable collective agreement (CAO, Collectieve ArbeidsOvereenkomst) with conditions more favourable than the core working conditions, those under the CAO apply.

In accordance with the EU Posting of Workers Directive, an employer established abroad that posts employees to a company in the Netherlands, as of 18 June 2016, must meet a number of obligations to guarantee enforceability.

The employer established abroad is legally obliged to issue all the information required to comply with the legislation to the Dutch Inspectorate SZW (Ministry of Social Affairs and Employment).

The employer is also bound by obligations of administration and appointment. The administration obligation entails the employer established abroad making available in the Netherlands specific documents such as passport, payslips, working time statements, proofs of payment, an employment contract and proof of payment of social security contributions in the country of origin (for example an A1 Declaration). The appointment obligation entails the employer established abroad nominating a contact in the Netherlands to approach the Dutch Inspectorate SZW (Ministry of Social Affairs and Employment), who can also be contacted by the Inspectorate SZW.

Reporting obligation

The employer established abroad also has a fourth obligation, of reporting. This obligation is not yet mandatory but will soon require additional action. This far-reaching obligation entails the employer established abroad reporting specific data to the Dutch Inspectorate SZW (Ministry of Social Affairs and Employment) prior to posting the employee in the Netherlands. The report must include the following information as a minimum:

  • The identity of the service provider.
  • The identity of the recipient of the service.
  • The identity of the employee.
  • The identity of the person responsible for salary payments.
  • The contact person appointed.
  • The type and estimated duration of the work.
  • The workplace address.
  • The sector of the work in question.

The corresponding digital reporting system remained under development; this obligation was therefore not yet relevant. The reporting obligation may be entering into force on 1 March but no later than 30 July 2020 (by this date, all EU Member States are required to have transposed the Directive into their national legislation).

The company established in the Netherlands where the employees from another EU Member State are posted is required to inspect the posting. This duty to inspect consists of the following elements:

  • The employer established abroad is required to issue a copy of the aforementioned report to the Dutch company.
  • The Dutch company is required to check whether the report has been made and whether the employees in post correspond to those indicated in the report, no later than the date on which they start work.
  • The Dutch company is required to check whether the type and duration of the work and the workplace address indicated by the employer established abroad are correct.

All incorrect information must be reported to the Dutch Inspectorate SZW (Ministry of Social Affairs and Employment). In the event of a missing or incorrect report by an employer established abroad, the Dutch employer will not be subject to penalties (see the penalties section below).

All these obligations also apply to the self-employed (not always in full). Freelancers are also subject to reporting obligations!

An extensive Decision clarifying the reporting obligation was published on 3 December 2019. Annual reporting is permitted for service providers established abroad under the following conditions:

  • If the service provider has at least one and no more than nine employees OR
  •  If the service provider is established within 1000 kilometres of the Dutch border OR
  • If the service provider is registered with the Netherlands Chamber of Commerce OR
  • If the service provider has submitted at least three reports in the previous calendar year.
  • Annual reporting also applies to haulage of goods by road. Annual reporting does not apply to the construction sector or temporary employment agencies (regular reporting is therefore required in these sectors).

No reporting is required for temporary assignments that began prior to the entry into force of the reporting obligation.

For example, reporting is not required for employees working under Dutch law. Additional rules and regulations apply to the transport sector, for example. Space is insufficient in this overview to consider all such details.


A €12,000 penalty per employee or breach can be imposed for failure to comply with the obligations. This also applies to the party hiring the employee. This penalty can be reduced or increased under certain circumstances. Penalties may be collected abroad.

In addition to the penalty, employees are entitled to inform their employer of their rights and claim certain employment conditions.

EU Directive

As indicated above, the EU Posting of Workers Directive is mandatory. Similar conditions therefore apply for posting to other countries. However, every country has its own rules and regulations.

German legislation includes extensive obligations, in the Arbeitnehmer-Entsendegesetz, the Arbeitnehmerüberlassungsgesetz, the Handwerk-Verordnung and the Mindestlohngesetz. As part of its implementation of the EU Directive, Germany has indicated the right not only to the minimum wage but also to other types of remuneration, including the fiscal exemption of the compensation of certain specific costs. Certain specific, more extensive German legislation applies to employees seconded for over 12 months. Germany has not yet fully implemented the Directive, but is required to do so by 30 July 2020. The penalty is considerable: imprisonment or a fine of up to €500,000.


Reporting of secondment of employees to the Netherlands will soon be mandatory. The hiring party is obliged to check this report. Non-compliance with these obligations may result in considerable sanctions.

If you require further information or have any questions, feel free to contact:

drs. R.W.M. te Kaat
+31 (0)314 369111
+31 (0)6 11274485

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