Provision of Personnel Admission Act: New Admission System for Suppliers

On 23 October 2023, the proposal for the Provision of Personnel Admission Act (Wet toelating terbeschikkingstelling van arbeidskrachten (“Wtta”) was submitted to the Dutch Lower House of Parliament. The Wtta aims to curb abuse in the employment agency sector. Such abuse includes underpayment of wages, excess of working hours, illegal employment, non-payment of taxes, or even cases of labour exploitation. Abuse may lead to situations of hardship and affects migrant workers in particular. Migrant workers are a vulnerable group that is often greatly dependent on an employment agency, especially if the agency also provides for their housing, transportation, health insurance, etc. In addition, this may result in unfair competition with well-intentioned employment agencies. 

The Wtta provides for a new admission system for all suppliers that make workers available under the Placement of Personnel by Intermediaries Act (Wet allocatie arbeidskrachten door intermediairs, “Waadi”). In summary, the admission system implies that suppliers will be admitted, on the basis of an application, to making temporary workers available for a period of 4 years. 

Suppliers will have to meet the following requirements to be admitted: 

• The supplier has to be registered in the Trade Register; 
• The supplier has to submit a Certificate of Conduct (“VOG”) for legal entities. Upon each change of a director or other key position, a new VOG has to be provided; 
• The supplier has to pay a financial security deposit of €100,000 to the administrator; starting suppliers will pay €50,000. This deposit serves to cover the risk that a supplier fails to pay wages, insurance contributions, taxes and/or fines; and 
• The supplier has to substantiate that it has complied and will keep complying with the set of standards of the Wtta. The set of standards is a quality test of the Wtta to be adopted later in secondary regulations. 

The Act offers companies the option to apply for an exemption if they make workers available to a very limited extent. 

It also gives more responsibility to hirers, who will have to check in a public register whether the supplier has been admitted under the Wtta. The same responsibility applies in re-hire situations, where workers are made available to third parties. This means that both the end hirer and the re-hirer(s) may be fined for hiring workers from a non-admitted supplier. 

An administrator of the new Act still to be designated will be charged with granting and reviewing admissions and exemptions. The Dutch Labour Inspectorate is charged with the enforcement of the new admission system. 

The original aim was to have the Wtta enter into effect on 1 January 2026 and to commence enforcement of the admittance obligation on 1 January 2027. On 25 October 2024, the Minister of Social Affairs and Employment (in Dutch: ‘SZW’) announced in a letter that this time path was no longer feasible since there was no definitive administrator (admitting agency) for the Wtta yet. A decision on the administrator is expected to be made in January 2025. 

In the letter of 25 October 2024, the Minister of SZW acknowledged the undiminished urgency to fight abuse in the employment agency sector. Additional measures are therefore taken and further examinations performed simultaneously with the Wtta, such as expanding the capacity of the Labour Inspectorate and examining a possible ban on temporary agency operations in certain sectors. 

It is clear that the Minister of SZW has big plans to fight abuse in the temporary agency sector. Bad-faith employment agencies and migrant workers remain hot topics, which we can expect to hear more about soon. In his letter of 25 October 2024, and again in the debate in the Lower House on 11 December 2024, the Minister of SZW promised to inform the Lower House in January 2025. We can therefore expect a start of the new year with more clarity on the Wtta.