Hiring staff through a temporary employment agency
Wednesday 16 April 2025
Hiring staff through a temporary employment agency can be a smart solution for companies that need flexible and temporary workers. In today’s fast-changing labor market, agencies like Uitzendbureau Flexibel make it possible to quickly respond to staffing needs without the long-term obligations of traditional employment. But what does it actually mean to hire through an agency, and how does it differ from other employment models?
To answer these questions, we explore the basic concepts of hiring via a staffing agency, the flexibility it offers, and the financial benefits employers can gain. More and more companies are using this form of workforce management to increase operational efficiency and respond better to short-term needs such as projects or seasonal work.
How does hiring through a staffing agency work?
When a company hires staff through an employment agency, the client enters into a service agreement with the agency. The agency is responsible for recruiting and selecting suitable temporary workers. The worker is formally employed by the agency but performs tasks under the supervision and direction of the client company.
Key aspects:
- Collective labor agreements (CAO): Agencies are often bound by the ABU-CAO, which means temporary workers are entitled to the same pay as comparable employees at the client company.
- Employment history: The worker’s employment record can influence their rights and conditions during the assignment.
- Legislation: The WAADI law (Allocation of Workers by Intermediaries Act) ensures equal treatment and shared liability when hiring agency staff.
Hiring temporary workers provides flexibility but also comes with responsibilities. Good agreements between the company and the agency ensure smooth collaboration.
What does “hiring personnel” mean?
Hiring personnel means that a company uses employees who are officially employed by another organization, such as a staffing agency. These workers perform their duties under the supervision of the hiring company, but their employment contract remains with the agency. The hiring company may be responsible for wage taxes and, in some cases, VAT. Temporary workers must receive the same employment conditions as comparable staff according to collective labor agreements. The “inlenersbeloning” (hiring reward) guarantees fair pay and may include bonuses such as year-end allowances.
Definition and key concepts
A temporary worker has an employment contract with the staffing agency, not with the company where they work. Even if the worker is assigned to another company, the employment relationship remains with the agency. Many agencies work with a phased system that takes previous assignments into account when determining the worker’s rights.
Difference from other forms of external labor
When hiring via an agency, the worker remains an employee of the agency but works under the client’s supervision. This differs from contracting, where a subcontractor delivers a finished result rather than labor. Agency work focuses on manpower and skills contributing to the hiring company’s workflow. The Labor Inspectorate regularly checks whether both the hiring and supplying companies comply with all legal and CAO requirements.
Reasons for hiring staff through an agency
Hiring through an agency offers many advantages. Agencies ensure that workers operate under proper conditions, promoting fairness and transparency. Dutch law (Article 12a WAADI) obliges clients to inform agencies in writing about applicable employment terms before hiring begins. This guarantees that agency workers receive equal pay and treatment as permanent staff. It combines flexibility with legal compliance so companies can focus on their core business.
Flexibility in workforce management
Flexible employment relations allow businesses to adapt their workforce to current demand. Agency workers can be called upon as needed, ideal for workload peaks. This flexibility means companies only pay for hours worked. Although the agency is the formal employer, the client must provide a safe and suitable workplace and comply with labor laws.
Cost savings and efficiency
Hiring temporary staff can lead to major savings and operational efficiency. Many companies use a payroll structure, where the agency handles administrative tasks. This reduces employer burdens but adds an agency margin. Using the VAT reverse-charge mechanism and obtaining a tax payment certificate from the agency can reduce risks and costs.
The process of hiring through an agency
The process involves three parties: the staffing agency, the temporary worker, and the client company. The agency signs an employment contract with the worker, while the client signs a service agreement with the agency. Although the agency is the legal employer, the worker operates under the client’s supervision. The client must apply the correct CAO pay scale (“inlenersbeloning”) to ensure equal treatment.
Legal obligations for clients
Clients must ensure safe working conditions and equal terms for temporary workers. They must also provide written information about pay scales and conditions to the agency, as required by Article 12a WAADI. Failure to do so may lead to compliance issues or fines.
WAADI registration requirement
All staffing agencies must be registered with the Dutch Chamber of Commerce under the WAADI Act. This ensures transparency and prevents the hiring of unregistered intermediaries. Violations can lead to fines ranging from €8,000 to €96,000. Registration is mandatory for all organizations that supply labor, except sole proprietorships.
Liability of hiring companies
Under Dutch law, hiring companies share responsibility for wage taxes and VAT if the staffing agency fails to meet its obligations. This includes income tax, social security premiums, and healthcare contributions. To limit this risk, companies can use a blocked account (g-account) to pay taxes and contributions directly.
The importance of equal pay (“inlenersbeloning”)
The inlenersbeloning ensures that agency workers receive the same compensation as permanent employees in comparable roles. This includes basic salary, bonuses, and other benefits. Since 2023, these rules have become stricter to guarantee fair treatment across the staffing industry.
Responsibilities of the client company
A client company that hires through an agency has a duty of care. This includes timely communication of pay structures, ensuring correct salary payments, and compliance with occupational health and safety standards. Failure to meet these obligations can result in financial or legal consequences.
Comparison with other labor types
Temporary work differs from subcontracting or freelance arrangements. Agency workers have legal rights and protections under the ABU-CAO. Depending on the contract phase, they may receive permanent contracts after specific periods.
Secondment vs. temporary employment
Secondment and temporary employment are similar but differ mainly in contract duration and termination rights. In both cases, liability rules apply equally, and administrative accuracy is essential to ensure correct taxation and compliance.