Ban on Hiring Out Highly Skilled Migrants?

On November 8, 2024, the Minister for Asylum and Migration, Marjolein Faber-van de Klashorst, announced in a letter to Parliament her intention to prohibit the commercial hiring out of highly skilled migrants, with two possible exceptions. What is the background of this proposal? What exceptions are included in the current proposal? Is there a timeline for when the definiteproposal will be published or come into effect? This blog explores these questions.

When companies wish to hire a highly skilled migrant, the employer must be a recognized sponsor approved by the Immigration and Naturalization Service (IND). Staffing agencies and payroll organizations can also become recognized sponsors if they meet an additional requirement of holding an SNA-certification.

There are many scenarios in which a company may prefer to engage a highly skilled migrant through a staffing agency or payroll organization. For instance, this may be a solution when the hiring company has not yet obtained recognized sponsorship, there is a need for temporary or flexible staff, recognized sponsorship has lapsed due to a merger or acquisition or the work arrangement involves remote working.

In such cases, the highly skilled migrant enters into an employment contract with the staffing agency or payroll organization, which then makes the migrant available to the company where the work is actually performed.

Background of the proposal and "Urgency"

The Minister explained in her letter that since 2018, the IND has identified potential misuse of the highly skilled migrant procedure in case of staffing agencies and payroll companies. The following examples were cited:

“Individuals, whether wealthy or not, who do not live or work in the Netherlands but obtain residence permits through these arrangements.

Sanctioned companies or companies with criminally convicted executives hiring migrants without adequate oversight via such arrangements.

State actors misusing these arrangements to facilitate unauthorized transfers of knowledge or technology.

Companies whose recognized sponsorship applications were denied, withdrawn, or suspended still hiring highly skilled migrants through staffing arrangements.

Intermediaries facilitating fraudulent setups such as sham employment, where the foreign national operates as a self-employed entrepreneur.

Abuse of working conditions, where highly skilled migrants face poor treatment or are not paid their agreed wages. The triangular relationship obscures where the migrants are actually employed and under what conditions, leaving them vulnerable.”

However, the Minister did not address the legitimate and positive use of hiring out highly skilled migrants through staffing agencies or payroll organizations. For example, companies without fixed work locations or those requiring temporary expertise for specific projects that could benefit from such arrangements. The author of this blog believes that the identified risks could also be mitigated by less severe measures.

The Ban and Exceptions

The Minister concluded that measures are necessary to prevent the aforementioned misuse. The primary proposed measure is a general ban on recognized sponsors commercially hiring out highly skilled migrants. Two exceptions to this ban are proposed:

The hiring company is awaiting approval of its recognized sponsorship application but requires the highly skilled migrant to start work earlier.

Innovative start-ups and scale-ups in early phases that cannot yet meet all conditions for recognized sponsorship but require specialized knowledge to grow.

The Minister has not provided detailed criteria for determining whether a company qualifies as an innovative start-up or scale-up, though she referred to alignment with the "Essential Start-up Personnel Pilot" and indicated that the Netherlands Enterprise Agency (RVO) would evaluate such applications.

If one of these exceptions applies, a residence permit can be granted to the highly skilled migrant for a maximum of two years. Previously issued residence permits will remain unaffected by the ban for the time being. In these exceptional cases, additional information must be submitted during the residence permit application process. Other proposed changes involve increasing the information and care obligations of recognized sponsors, though these have not been elaborated upon in the Minister’s letter.

Timeline and Conclusion

The Minister's letter outlines her intent to implement these changes. However, as of the publication date of this blog, no definitive legislative proposal or policy amendment introducing the ban has been finalized. The letter hints at a possible amendment to the Foreigners Regulation 2000, a policy change that does not require approval from the Dutch Parliament. Such a change could be implemented relatively quickly. Whether the proposed changes will be enforced as strictly as outlined remains uncertain. Regardless, it is advisable to explore alternative options in advance should the ban be implemented.

For the exact content of the Minister’s letter, please refer to https://www.tweedekamer.nl/kamerstukken/brieven_regering/detail?id=2024D42903&did=2024D42903

Want to know more about this topic? Contact Thom Schot for expert advice!