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cross-border service provision

  • Cross border service provision

    Employers in the EU can temporarily post their non-EU employees (third country nationals) to the Netherlands without the requirement of a work permit. This type of employment is called cross border service provision.

    The following questions must be answered to determine the course of action:

    • is the non-EU employee allowed to work in the Netherlands without a work permit?
    • is a notification required for the posting of either a non-EU or an EU employee?

    A cross border service contract includes 3 parties; employer (A) in an EU member state temporarily assigns one or more of its non-EU employees (B) to carry out work for employer (C) in another EU member state.

    This type of service provision is also referred to as the posting of workers. Posting workers within the EU is regulated in the Posting of Workers Directive.

    Read more about Posting workers in the EU.

    It is important that the employees legally reside and work in the country where the foreign employer is established. The employer who posts the workers must be able to demonstrate corporate activity in the same country. These conditions are there to prevent activity of mailbox firms. 

    Background

    The exemption of a work permit in case of cross border service provision was laid down by the Court of Justice in Luxemburg in the case Essent, 2014. This case was advocated by Ted Badoux of Everaert Advocaten. 

    The ruling was ground-breaking and was picked up by national media.

    The exemption is now laid down in the Decree on Foreign Nationals and Executive Decree on the Work by foreign nationals Act. It was published in State Newspaper 348 (in Dutch). The legislation also includes the requirements that are effective per next year. 

    For more information about cross border service please contact Marcel Reurs or Bram van Melle.

  • Introduction: Working in the Netherlands

    If a non-EU person (third country national) wants to work in the Netherlands, he/she can do so as a Highly Skilled Migrant, with an EU Blue card or with a combined permit for stay and work (GVVA). If it concerns an intra company transferee, the EU ICT Directive may be applicable. Lastly, there are special regulations for posting staff within the EU (cross-border service provision).

     [continues below matrix]

    Matrix comparing Highly Skilled Migrant program, EU Blue Card, EU ICT and national ICT:
     
    highly skilled
    migrant program
    blue card program
    ICT EU
    ICT national

    position

    manager, specialist

    manager, specialist

    manager, specialist or trainee as defined in Directive 2014/66

    manager, specialist

    salary threshold

    see current amounts here

    see current amounts here

    see current amounts here

    see current amounts here

    salary competitive with labor market?

    yes

    fixed in salary threshold

    yes

    yes

    processing time

    2 weeks for recognized sponsor

    2 weeks for recognized sponsor, max. 90 days for non-recognized sponsor

    2 weeks for recognized sponsor, max. 90 days for non-recognized sponsor

    3-5 weeks work permit/ 90 days residence permit

    posting or local contract?

    local

    local

    posted assignee remains employed by foreign employer

    both possible, as long as assignment is temporary

    awaiting decision abroad?

    only if visa required

    only if visa required

    only if visa required

    only if visa required

    education

    college-academical

    college-academical of at least 3 year

    voor trainee: master degree

    college-academical

    may family members work?

    yes

    yes

    yes

    work permit (not tested) required

    validity

    duration of contract; max 5 years

    duration of contract; minimum 1, max 4 years

    duration of assignment; max 3 years

    duration of assignment; max 3 years

    extension possible?

    yes, unlimited

    yes, unlimited

    no - 6 months cooling-off period after 3 years of EU ICT labor*

    yes, as long as assignment remains temporary

    permanent residency possible?

    yes

    yes

    yes, but only based on national policy

    no

    mobility in EU?

    no

    yes, after 18 months

    yes

    no

    * There are options to remain in the Netherlands by changing immigration category

     

    Our services

    Everaert Advocaten has more than 30 years of experience in assisting Dutch and international companies in the Netherlands and abroad. Our lawyers are seasoned professionals in the field of labor migration to the Netherlands and Europe.

    We can help to find your best options, which application types are best suited to your needs and advise on the compliancy issues involved. When things have gone awry, you can also call in our support.

    For more information or advice on any of the above, please contact Marcel Reurs or Bram van Melle.

     

  • Notifications Posted Workers to be done online as of 1 March 2020

    From 1 March 2020 employers and self-employed from other EU Member States who are posting a worker in the Netherlands must notify this in advance via the online portal or risk a penalty of up to €4,500 per posted worker.

  • Penalty amounts for not (timely) notifying

    On March 1, 2020, online notification of posted workers will become mandatory in the Netherlands.

  • Posted Workers in the EU

    From 1 March 2020 employers and self-employed from other EU Member States who are posting a worker in the Netherlands must notify this in advance via the online portal or risk a penalty of up to €4,500 per posted worker.

    The company in the Netherlands receiving the posted worker is obliged to verify whether the notification was timely and correct or risk the same penalty.

    The penalties can be issued cross-jurisdiction: the Dutch enforcer, the Inspectie SZW, can issue a penalty to a foreign service provider or assignor, but you can also be confronted with a penalty from an enforcer in another Member State.

    The notification and verification requirement applies to all posted workers, including those who are citizens of the EU.

    European Directives 

    The four freedoms of the EU and the EER include the freedom of services: companies and persons are allowed to perform a service in another Member State and have the work carried out by their own, regular personnel. To ensure fair competition and employment conditions, the European Commission has adopted 2 Directives: According to Directive 96/71 (Posted Workers Directive) (Detacheringsrichtlijn), a posted worker is entitled to a set of core rights that are in force in the host Member State. Directive 2014/67 (Enforcement Directive) provides for measures the Member States must take in order to ensure compliance with Directive 96/71/EC. One of these measures is the introduction of a notification requirement.

    Posted Workers Act (WagwEU)

    In the Netherlands, these Directives have been implemented in the Posted Workers Act (WagwEU).

    Which obligations do I have?

    Employment conditions

    You must ensure that employees you are posting or receiving are remunerated in accordance with the labour laws of the Member State where they will be carrying out the work, pertaining to:

    • minimum rates of pay
    • maximum work periods and minimum rest periods
    • minimum paid annual leave
    • the conditions of hiring out workers through temporary work agencies
    • health, safety and hygiene at work
    • equal treatment of men and women

    In the course of 2020 these rules will be further tightened. Employers will be required to pay the market level salary of the host country rather than the minimum wage. Additionally, the maximum duration of a secondment will be 12 months with a possible extension of 6 months, after which the host member state’s labour laws will be fully applicable.

    Contact person

    The company posting the worker will need to designate a contact person as point of contact for the authorities of the host Member State. The contact person must be available in the host member state and the contact details must be shared in the notification.

    Record keeping duty

    The company hosting the worker must obtain certain documents and keep those at the work location. The following documents must be kept on file:

    • the employment contract
    • the payslips
    • a work time sheet
    • evidence of payment of social premiums
    • evidence of payment of wages

    These documents can be kept as either digital or paper copies and must be available for enforcement officials at the work location.

    Notification

    The company posting the worker must notify this in advance via this online portal. We made a checklist of all the information you need to do the notification, which you can download here. An FAQ can be found here.

    Verification

    The receiving company must ask the company posting the worker for a copy of the notification and verify whether the notification was timely and the provided information correct. If not, the receiving company must report this to ?, and the worker may not commence work. Only then the receiving company can avoid a penalty.

    The notification and verification requirement will take effect on 1 March 2020 and will apply to all posted workers’ activities starting from that date.

    Notifications can be done from 1 February 2020.

    Exceptions to the notification requirement

    Self-employed are only subject to the notification requirement if they work in designated sectors. You can find these sectors here.

    Small companies (1-9 employees) and self-employed who are not exempted and who are located within a 100 km radius from the Dutch border may do an ‘annual notification’, provided they:

    • Have carried out at least 3 transnational services in the Netherlands in the past calendar year or have filed a valid notification in the past calendar year
      AND
    • are registered in the trade register or a comparable register in neighbouring countries
      AND
    • are not working in construction, labour intermediation or personnel management.

    Certain activities are exempt from the notification requirement. These activities can be found here.

    Want to know more?

    If you are unsure whether or not your business needs to file notifications at all, or if are you wondering whether your business is prepared to remain compliant with this new obligation, or of course if you need assistance with the filing process, feel free to reach out to Marcel Reurs or Bram van Melle.

  • Vignette for crucial cross-border workers

    Since Belgium prohibited all non-essential travel aswell, the waiting times for transport of goods and service provision traffic at the border with the Netherlands have increased significantly. A vignette is now available for cross-border workers with crucial professions or who provide vital services. With this vignette they can pass the border controls more quickly.