Zes valkuilen bij het inzetten van een Employer of Record

Er zijn redenen genoeg voor buitenlandse organisaties om Nederlandse arbeidskrachten in te willen huren: we zijn een hoogopgeleid land, spreken goed Engels en hebben een ondernemende geest. 

Maar als je als buitenlandse organisatie werkenden in Nederland in dienst wil nemen, moet je daar een lokale entiteit oprichten. Dat is een duur proces dat enkele maanden in beslag kan nemen. 

Er is een andere manier. Door samen te werken met een Employer of Record (EoR) kun je veel sneller je eerste werknemers in Nederland aannemen. Bovendien vermijd je de rompslomp en administratieve lasten die komen kijken bij het opzetten van een lokaal bedrijf.

Bovendien regelt een EoR doorgaans zaken als belastinginhouding, salarisadministratie, secundaire arbeidsvoorwaarden en naleving van wet- en regelgeving namens u – wat betekent dat u verder kunt gaan met het runnen van uw bedrijf.

Een Employer of Record inschakelen, kan dus een uitkomst bieden. Maar er zijn veel valkuilen wanneer bedrijven deze constructie inzetten. In deze Engelstalige expert blog legt Hannah Young van CXC uit wat deze valkuilen zijn en hoe je ze kunt voorkomen. 

Lees ook over een EoR inzetten:

• Compliant inhuren van medewerkers in het buitenland: Employer of Record

• Talent aannemen in het buitenland lastig, langdurig en duur? Niet met een EOR-platform

Using an EoR in the Netherlands

There are a lot of good reasons to hire workers in the Netherlands. For one thing, its workforce is highly educated: over 50% of 25–34-year-olds hold at least a degree-level qualification. The country’s capital, Amsterdam, is also fast becoming a key European tech hub, making it a top destination for those seeking remote tech talent in 2024. And the Netherlands’ consistently high rate of English language proficiency doesn’t hurt either. 

But here’s the problem: to engage workers in the Netherlands, you’ll need to establish a local entity there. That’s an expensive process that could take several months to achieve. 

There is another way. By partnering with an Employer of Record (EoR) you can hire your first employees in the Netherlands much more quickly. And you can avoid the hassle and administrative burden of setting up a local business too.

Plus, an EoR typically handles things like tax withholding, payroll, benefits and compliance on your behalf — meaning you can get on with running your business.

Using an EoR in the Netherlands? Watch out for these 6 common pitfalls

So, what’s the catch? Even when you’re working with an EoR, international hiring can be complex. And if you’re not careful, you could put your business at risk. But don’t panic — we’re here to help. Read on to learn about six common pitfalls to look out for when using an Employer of Record in the Netherlands.

1. Failing to educate yourself on employment law

Like any country, the Netherlands has specific laws that govern how employers treat their employees. And even if you’re hiring employees through an EoR, you still need to be aware of them. 

For example, the maximum number of working hours in the Netherlands is 60 hours per week and 12 hours per day — but these maximums can’t be worked every week. Employees can’t work more than 48 hours on average per week over a period of 16 weeks, or more than 55 hours per week over four consecutive weeks.

Employees are also entitled to 36 consecutive hours of rest after a five-day work week and have the right to at least 13 free Sundays each year.  And there are also strict employee protections that mean employers have to follow a specific process if they want to terminate an employee.

Let’s be clear: when you use an EoR, they become your workers’ legal employer. That means they’re responsible for complying with employment law. But you still need to understand the rules if you want to understand how your Dutch operations will work in practice. Plus, not complying with employment law is just not a good look for your company. In the worst cases, it could lead to serious reputational damage and badly hurt your employer brand.

2. Not accounting for employer contributions

As in most countries, employers in the Netherlands have to make certain contributions for each of their employees, including:

• Disability insurance contributions
• Health insurance contributions
• Childcare allowance contributions

All in all, this can add up to about 20% of the employee’s salary. An EoR will deal with the administrative aspects of these contributions. But you still need to ensure you budget for them when you cost up your Dutch operations.

The good news? A decent EoR will help you to understand all of the various charges you’ll have to pay (as well as their own fee). That way, you won’t be hit with any nasty surprises when their invoice arrives.

3. Not checking your EoR is licenced to do business (as of 2025)

In October 2023, the Dutch government proposed a bill that would introduce a licensing system for organisations that supply workers — which could include EoRs. Once it comes into play in 2025, these companies will have to meet certain criteria to get their licence. For example, they’ll have to sign a ‘declaration of good conduct’ and pay a deposit of €100,000. They’ll also have to prove that they pay workers fairly and pay their taxes.

So, what does this mean for your organisation? From 2025, you’ll need to check whether any EoR provider you work with is licensed to provide workers. You could be hit with a fine if you’re found to be working with an unlicensed provider.

Of course, if you’re reading this article in 2024, you might be thinking about engaging in an EoR before these regulations come into play. However, it’s still a good idea to talk to your provider about how they plan to comply with the new rules.

4. Assuming permanent establishment risk doesn’t apply to you

Permanent establishment is a tax concept that you need to know about before embarking on any sort of international expansion. Basically, a company is judged to have a ‘permanent establishment’ in a country if it has a stable presence there. And if they do, they’re likely to be liable for corporate taxes.

However, the exact rules differ from one country to another. The Netherlands, for example, sticks pretty closely to the OECD guidelines on what constitutes permanent establishment. Common triggers include companies having any sort of premises in the country — including retail outlets, points of sale or factories, for example.

Even just having a representative of your company working out of the Netherlands could be enough to trigger permanent establishment, particularly if their work generates revenue. And, crucially, engaging them through an Employer of Record won’t necessarily protect you.

So, how can you avoid triggering permanent establishment in the Netherlands? The best way is to choose an EoR partner with a deep knowledge of the ins and outs of Dutch tax law. This way, they’ll be able to help you understand how the law applies to your situation — and avoid putting your business at risk.

5. Not considering intellectual property assignment and confidentiality

When you hire an employee directly, the contract you draw up usually includes provisions to protect your business — like clauses covering confidentiality and intellectual property (IP), for example. However, this isn’t necessarily the case when you hire someone through an Employer of Record.

Let’s look at IP first. If you hire someone to create any sort of intellectual property, you might assume that the rights to these creations automatically belong to you. But in the Netherlands, this depends on the contract between the worker and the employer — in this case, the EoR.

So, how can you ensure your IP is protected? As a starting point, be sure to ask your EoR whether its contracts automatically include provisions for the assignment of intellectual property rights. If they don’t, make sure they include them for your workers.

Also, non-disclosure agreements are not included as standard in Dutch employment contracts. That means that if your workers come into contact with sensitive information, you should specifically ask your EoR to include one.

6. Failing to address cultural misalignment issues

Using an EoR makes it easier to compliantly hire workers abroad. But you still need to give some thought to the cultural norms, values and expectations about work of the country you’re hiring in.

Here’s an example: in the Netherlands, it’s customary (but not mandatory) for employees to receive a bonus in November or December each year. If you don’t give them this bonus, you’re not doing anything wrong legally, but you might still upset or alienate your workers.

This also extends to the subtler aspects of how people relate to employment. In the Netherlands, people tend to take a fairly informal approach to work. Organisations often have relatively flat structures, and higher-ups frequently work with those on lower levels. Dutch people also tend to be direct and honest at work — even with their bosses.

Of course, it’s impossible to distil an entire country’s attitude towards work into a few sentences. But the important thing is to ensure your expectations are in line with the norms your employees are used to. Otherwise, you’re likely to face problems with talent attraction, engagement and retention.

Key considerations when choosing an employer of record in the Netherlands

Looking for an Employer of Record to help you hire talent in the Netherlands? Here are a few things to keep in mind as you’re shopping around for providers:

Licencing: As we mentioned, employment agencies in the Netherlands will need to obtain a special licence to keep doing business from 2025 onwards. After this point, the first step in finding an EoR will be to check if they have this licence. If not, walk away.

Cost: One of the biggest things to consider when partnering with an EoR is what it will cost you. And it’s not just about the pure numbers, but how costs are calculated. For example, some EoRs charge a flat fee per employee, while others base their rate on a percentage of the employee’s salary. You need to choose a provider whose pricing structure works for your organisation.

Expertise: You should always ensure that an EoR you’re considering working with has the necessary expertise and knowledge to help you succeed. How? The first step is to check out reviews from the EoR’s existing customers — particularly those who use their services in the Netherlands.  

Country coverage: It goes without saying that you need to make sure your EoR provider can meet your needs in the Netherlands. But you should also check if the EoR has coverage in other countries where you may want to hire in the future. After all, it’s much simpler (and often more cost-effective) to work with just one provider for all of your EoR needs.

Easily engage workers in the Netherlands with CXC

At CXC, we’ve been helping companies like yours to source, engage and hire workers all over the world for more than 30 years. Through our vast network of legal entities, we’re able to offer our services in more than 100 countries worldwide — including the Netherlands.

Thanks to our experience, we know that every company is different. That’s why our Employer of Record solutions are designed to be flexible and meet your workforce needs, whatever they are.

Whether you just want to onboard a handful of skilled workers or launch a full-blown international expansion, we can help.

Speak to our team today to learn more.

Bron: CXC