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WagwEU: The why, when and how

22-03-2020

You will have noticed that workers and self-employed people from EEA Member States and Switzerland who have come to perform work in the Netherlands since 1 March must be reported on the Ministry of Social Affairs and Employment’s new notification portal. This notification duty for postings since 1 March 2020 does not stand on its own, but is merely one part of the obligations stemming from WagwEU. Since 1 March 2020 is approaching fast, here are a few reminders: the why, when and how of WagwEU.

Why WagwEU?

The obligation to send information to the Ministry of Social Affairs and Employment stems from the Terms of Employment Posted Workers in the European Union Act (WagwEU), which is the Dutch codification of the European Directive on the Posting of Workers (2014/67/EU). WagwEU was introduced to ensure the application in the Netherlands of European Directive 96/71/EC on the posting of workers. The question therefore is actually: why does the Posting Directive (96/71/EC) exist? This could be best explained with an example.

Labour legislation in the Netherlands is fairly strict and wages are relatively high. In a number of other EU Member States, wages are lower and employers have fewer obligations towards their employees. In accordance with European freedoms, residents of these Member States may simply come and work in the Netherlands. It may be advantageous to borrow a foreign worker from a contractor established in the EU/EEA and/or Switzerland (hereafter: foreign contractor) to do a temporary job in the Netherlands. Since Dutch labour law would then not apply, you will not only save on labour costs, but also in terms of employer risks with regard to employees. This is called ‘social dumping’. Such practices not only generate unfair competition and disturbance in the local labour market, but also lead to the exploitation of foreign workers.

The purpose of the Posting Directive (96/71/EC) is in fact to prevent ‘social dumping’ by making the main conditions of the labour legislation of the country of employment applicable to foreign workers during the period of their posting in the country of employment. This contributes to the social protection of posted workers.

When should I take WagwEU into account?

WagwEU must be taken into account whenever an employee of an employer in an EU/EEA Member State or Switzerland comes to perform work in the Netherlands. This applies both to postings of workers for cross-border service provision, and to the cross-border lending or onlending of staff.

There are a few exceptions:

–  Employees who come to work (temporarily) on a local contract in the Netherlands;

–  Employees who come to perform occasional work in the Netherlands. Examples are:

o Initial mounting or first installation of goods;
o Urgent maintenance or repairs;
o Attending academic conferences;
o Business meetings or the signing of contracts.

WagwEU does furthermore not apply to postings from third countries, to which Dutch labour migration laws do not apply. Note: WagwEU does however apply when employees who are not EEA or Swiss nationals but who have a valid residence permit for one of these countries are sent to the Netherlands by a foreign contractor!

How do I comply with WagwEU?

WagwEU gives rise to obligations both for the foreign contractor and for the Dutch client. Failure to comply with these obligations can lead to a fine of up to € 12,000 per person. The exact amount will depend on the offence.

Foreign contractor

The foreign contractor must ensure that the main conditions of Dutch labour law are fulfilled during the posting. The main conditions of Dutch labour law are:

– The minimum wage;
– Sufficient rest time;
– Safe work conditions;
– Fair treatment of all genders;
– A minimum number of paid holidays.

If a collective agreement applies, the essential terms must be established in accordance with the applicable collective agreement.

In addition to the above, the foreign contractor has a duty to provide information, a duty of administration, and a duty to designate (i.e. the duty to designate a contact person in the Netherlands). The duties to inform and to designate must be fulfilled before the worker is sent to the Netherlands.

By notifying the posting on www.postedworkers.nl, they are already (partially) fulfilling the duty to inform and to designate. The duty of administration pertains to documents that must be available either on paper or electronically at the workplace during the posting. Such documents include for instance:

– A copy of the work contract;
– The posting contract;
– Passport;
– Wage slips;
– A summary of work hours;
– Proofs of payment of the wage;
– Proof that insurance premiums are being paid.

Dutch client

The client in the Netherlands has a duty to check. Before work may start in the Netherlands, the client must first have checked whether the conditions are being fulfilled. Once the foreign contractor has notified on www.postedworkers.nl, the Dutch client will receive a message to check the notification.

If the foreign contractor has not notified anything, a request can be sent to the employer via the online portal to fill in an online notification.

To conclude

As mentioned earlier, the duty to notify does not stand alone, but forms part of a bigger whole. Compliance with WagwEU is therefore not just a matter of notifying (or checking the notification)!

Make sure therefore that workers posted to the Netherlands meet the main labour conditions of Dutch labour law. Also make sure that any information that must be (electronically) available is present at the workplace during the posting.

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