Many organisations use foreign workers to compensate for staff shortages, bring in specialist knowledge, or execute projects. In doing so, considerations often include labour costs, availability, and operational flexibility. Less attention is sometimes paid to the legal qualification of the collaboration. However, this qualification is crucial for the WTTA.
Contracting of work or provision of workers?
In international employment relationships, it must first be established precisely what work is being performed and under whose direction and supervision it takes place.
An important distinction is:
Contracting of work
A foreign company executes a task or project under its own direction and supervision. The client purchases a result, not personnel (obligation to achieve a result). In that case, there is generally no question of providing workers. Contracting of work is sometimes referred to as “contracts”.
Provision of workers
Employees in fact work under the direction and supervision of the Dutch client. The foreign company then supplies staff instead of a final result. In that case, there may be a situation of provision of workers, and the foreign company, in principle, falls under the WTTA.
This distinction regularly proves to be less clear in practice than initially assumed.
International deployment brings additional risks
The WTTA does not stand alone. Foreign companies that provide workers to Dutch organisations often have to deal with additional obligations and risks.
Consider, for example:
- possessing the correct work and residence permits;
- risks of illegal employment;
- application of the anonymous rate when employees do not have a BSN;
- being able to demonstrate that the correct wage has been properly paid;
- housing obligations for labour migrants;
- notification obligations under the WagwEU;
- liability risks for the Dutch hirer.
For Dutch organisations, it is therefore important to look not only at the contractual agreements but also at the actual execution of the work.
Protection of labour migrants is key
An important objective of the WTTA is to prevent abuses involving labour migrants and other vulnerable groups of workers. This includes situations where employees face underpayment, unclear employment conditions, poor housing, or other forms of labour exploitation. Organisations that use foreign workers would therefore be wise to critically assess which parties they collaborate with and what safeguards exist within the chain.
Tax consequences also deserve attention
In addition to employment law obligations, international situations often involve tax considerations. Employees who perform work in the Netherlands on behalf of a foreign company may, under certain circumstances, become taxable in the Netherlands from the first day of work. This can create an obligation for the foreign employer to maintain Dutch payroll administration and withhold and remit payroll taxes.
For contracting of work, different tax rules may apply. Under certain conditions, based on tax treaties, the taxing right only shifts to the Netherlands when employees work in the Netherlands for more than 183 days. There are, however, important exceptions to this main rule, for example when the work is conducted on behalf of a (deemed) permanent establishment in the Netherlands. In such cases, Dutch tax liability may still arise from the very first day of work.
Also ensure correct remuneration
From an employment law perspective, equal remuneration is also an important point of attention. Employees of foreign companies who are assigned to a Dutch client are, according to the Waadi (as of 2027), in principle entitled to equivalent employment conditions and pay as comparable employees of that client. This obligation also follows from the WTTA’s standards framework.
Failure to comply with the principle of equal pay can affect not only the foreign employer. The Dutch hirer can also face wage claims and liability risks; this is also known as hirer’s liability.
A comprehensive assessment prevents surprises
For organisations working with foreign workers, it is therefore important to look beyond the WTTA alone. The way in which personnel is deployed can have consequences in the areas of employment law, tax, immigration, social security, and compliance.
A comprehensive analysis of the structure, the contracts and the actual work helps to identify risks in time and take appropriate measures.
Does your organisation make use of foreign workers or foreign service providers? If so, it is advisable to assess in good time whether it concerns contracting of work or provision of workers and which obligations arise from this.
Would you like to know more? Contact one of our specialists. They are happy to help you out.
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