In the Netherlands every employer pays contributions to a sector fund. These funds were set up to finance unemployment benefits. Employers are classified in a sector fund on the basis of their business activities. The sector contributions payable in the various sectors vary widely. The contribution for the temporary employment sector is one of the highest. According to settled case law, classification in the temporary employment sector is determined on the basis of the type of contract. This must involve an employer that makes an employee available to a third party to work under the management and supervision of that third party. Until recently, occupational sector relief was available for the temporary employment sector: this allowed employers to be classified in the (often much less expensive) sector in which more than 50% of their workforce was available for contract.

Occupational sector canceled as of May 25, 2017

As a result of a recent amendment of the law, the occupational sector relief has been canceled for new cases as of May 25, 2017. This means that temporary employment agencies will fall under the relatively expensive Temporary Employment sector. The same applies to comparable employers, such as payroll companies. Moreover, according to the Explanatory Notes, this amendment also applies to employers that are classified in the Temporary Employment sector only to the extent that they perform outsourcing activities.

The Minister of Social Affairs and Employment indicated that employers that were classified in an occupational sector by the Dutch tax authorities before May 25, 2017 will retain this classification for the time being. Applications to determine classification in an occupational sector, which were filed before this date, will also be assessed on the basis of the rules applying before the amendment of the law. However, it will also be examined whether the occupational sector regime can be organized differently for these employers in the future.


The immediate impact of the amended law is that outsourcers that do not fall under the old regime will, as a rule, have to pay a higher sector contribution, and thus will be more expensive than outsourcers that can retain their occupational sector classification. It is still unclear how long this situation will last. There is no indication yet about the specifics of the alternative occupational sector regime or when this can be expected. Lastly, it is not clear how reorganizations and restructuring will affect the retention of an occupational sector classification.

The amended law does not require employers with an occupational sector classification, whose circumstances do not change, to take action in the short term. However, in the longer term it is possible that these employers will also be classified in the Temporary Employment sector. We will follow future developments closely. For more information about this, please get in touch with your designated contact at Meijburg & Co or with one of our specialists.

Consequences of the amendment of the law pertaining to the abolition of the occupational sector for staffing companies

Prior to the amendment of the law, staffing companies (companies that make workers available within a group) did not usually fall under the temporary employment sector. The occupational sector facility enabled these companies to be classified in the occupational sector of the profession for which the largest amount of annual salary subject to social security contributions is paid.

The amendment of the law also affects staffing companies, which in principle must be classified in the temporary employment sector. This appeared to be an unintended side effect of the amendment.

On July 10, 2017, the Minister of Social Affairs and Employment answered questions raised by Lower House members Omtzigt and Heerma. The Minister replied that staffing companies that only make employees available within their own group will be excluded from the mandatory classification in the temporary employment sector.

The Minister further stated that he intends to explicitly include this exception in the final rules. Until this exception is explicitly laid down, it will be anticipated in the implementation of the sector classification for new businesses.

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