New licensing requirements will reshape the Dutch temporary staffing landscape starting in 2027
The Netherlands is implementing significant new labor market regulations. The Authorization of Workers Act (WTTA) will fundamentally change how all talent supply firms operate, requiring government authorization for all labor leasing activities starting January 1, 2027.
This sweeping reform affects thousands of companies currently operating without regulatory oversight and brings the Netherlands in line with neighboring European countries that already mandate licensing for workforce providers.
Why the Netherlands Is Making This Change
The current Dutch system has operated largely without government oversight, creating a regulatory gap that has enabled questionable business practices. Approximately 16,000 companies are active in labor leasing, with another 53,000 registered for hiring out workers, yet only 4,859 hold voluntary NEN certification indicating compliant practices.
The Ministry of Social Affairs & Employment expects between 15,000 and 19,500 companies to apply for the new authorization, highlighting the scale of businesses currently operating without proper oversight.
Understanding the New Authorization Requirement
The WTTA introduces a simple but powerful concept: if you want to engage in labor leasing activities in the Netherlands, you must obtain prior government authorization. Labor leasing is defined as hiring out your employees to work under the supervision and control of a third party.
Who Must Comply
The authorization requirement applies broadly to all talent suppliers:
- Temporary work agencies and payroll companies
- Foreign companies performing labor leasing activities in the Netherlands
- Companies engaged in sub-leasing arrangements (extending the traditional three-party relationship to include a fourth party)
- Any business that occasionally lends employees to work under third-party supervision, even if labor leasing isn’t their primary activity
- Any company that lends out workers, regardless of whether they are a labor leasing company or not
Limited Exceptions
Only two categories are exempt from authorization requirements:
- Intra-company temporary employment arrangements
- Companies where leased worker wages represent less than 10% of their total payroll and don’t exceed €2.5 million annually (exemption must be applied for)
Authorization Requirements Breakdown
Obtaining authorization requires meeting four specific criteria, each designed to ensure operational compliance and financial stability.
1. Framework Standards Compliance
Companies must comply with standards aligned with NEN 4400-1 and NEN 4400-2, overseen by the Dutch Labour Standards Foundation. Key requirements include:
- Equal pay for equal work compliance
- Proper employment contract administration
- Tax and social security payment compliance
- Housing standards compliance if providing worker accommodation
2. Financial Security Deposit
A financial security deposit serves as a compliance guarantee:
- €100,000 for established companies
- €50,000 paid in two installments for new companies with provisional applications
- Funds returned after four years of compliant operations
- Exemption available for companies with four or more years of clean operations and tax compliance
3. Certificate of Good Conduct
All applicants must submit a Certificate of Good Conduct that is less than three months old. New certificates are required whenever management personnel change, ensuring ongoing leadership accountability.
4. SNF Certification (Housing Providers)
Companies providing housing to leased employees must obtain SNF certification if operating under a collective agreement. Companies not covered by collective agreements may choose from approved housing certification schemes.
Implementation Timeline
The WTTA has passed the Dutch House of Representatives and awaits Senate approval. However, the Netherlands currently does not have an active government, which could delay the process. Political directions may also shift, adding complexity to the timeline. The proposed implementation schedule provides a structured transition period:
- Mid-2026: Authorization applications expected to open
- January 1, 2027: Law takes effect, authorization required
- July 1, 2027: End of transitional period
- January 1, 2028: Full enforcement begins
These dates remain subject to final legislative approval, and current political developments, which may affect the final timeline.
Enforcement and Consequences
The Dutch Labor Inspectorate will gain significant new enforcement powers under the WTTA, with consequences affecting both providers and their clients.
Private audit organizations will conduct compliance inspections, while the Labor Inspectorate can impose additional fines and penalties. Inspections will verify company and worker identification, employment contracts, tax compliance, and equal pay obligations.
Penalties include:
- Financial penalties for both unauthorized providers and companies that hire them
- Temporary business shutdowns for serious or repeated violations
- No grace period for companies operating without authorization after the implementation date
Notably, client companies (hirers) face financial liability if they engage unauthorized labor leasing providers, creating shared responsibility for compliance throughout the supply chain.
How People2.0 Is Preparing for These Changes
We’re taking proactive steps to ensure seamless compliance with the new authorization requirements while supporting our customers through this transition.
Our Compliance Foundation
People2.0 already maintains NEN certification and largely complies with the framework standards that will be required under the WTTA. This existing compliance infrastructure positions us to obtain authorization efficiently when applications open.
Customer Support Initiatives
We’re developing systems to support our customers’ compliance needs:
- Maintaining an up-to-date internal WTTA supplier database with real-time authorization status
- Providing customers with immediate confirmation of our authorization status
- Verifying and documenting the authorization status of subcontractors in our network
What This Means for Your Business
The WTTA’s impact depends on your role in the Dutch labor market ecosystem.
For Staffing Agencies
If you operate directly in the Netherlands or work with Dutch partners, ensure your operations will meet authorization requirements. Key action items include:
- Reviewing current compliance with NEN 4400 standards
- Assessing financial capacity for required deposits
- Evaluating supply chain partners for authorization readiness
- Budgeting for potential increased compliance costs
For Companies Using Labor Leasing Services
Client companies face shared responsibility for ensuring their providers are authorized. Consider these steps:
- Audit current Dutch labor leasing providers for authorization readiness
- Understand that using unauthorized providers after January 2028 carries financial penalties
- Develop processes to verify ongoing authorization status of suppliers
Preparing for the New Requirements
The Authorization of Workers Act represents a fundamental shift toward greater accountability and transparency in the Dutch labor market. Companies that embrace these changes and invest in robust compliance programs will be well-positioned for success in the new regulatory environment.
The transition period provides adequate time for preparation, but proactive planning is essential. People2.0 is committed to supporting our customers through this transition. Our existing compliance infrastructure, combined with our proactive preparation for the new requirements, ensures we can continue providing reliable, compliant workforce solutions in the Netherlands.
