A new approval requirement for temporary employment agencies is introduced

The approval scheme requires staffing agencies to demonstrate compliance with the legal requirements for such operations in order to obtain approval. Approval will be a requirement for operating a leasing business. It will thus be prohibited to lease in/out labor from staffing agencies that are not approved. This represents a change from the current system, which only requires registration with the Labour Inspection Authority.

The Labour Inspection Authority will be responsible for approving the businesses, and the approval will be recorded in a register. The register will also indicate whether a staffing agency has a pending application for approval or has not obtained approval after such an application.

The purpose of the approval scheme is to find unscrupulous staffing agencies and make it easier to hire from reputable providers of labor.

How to become an approved staffing agency?

To be approved, the staffing agency must demonstrate compliance with the existing requirements that are already in place. Among other things, staffing agencies must provide evidence that they meet the requirements for protective services, written employment contracts, and that the agency has procedures in place to ensure compliance with the rules on equal treatment of wages and working conditions. Therefore, no additional substantive requirements are imposed, but the agencies must document compliance with the existing requirements.

The consequences of lack of approval

Violation of the rules can have consequences. If a company hires from an unapproved staffing agency, the hired employee may demand permanent employment with the hiring company and compensation. Lack of approval thus has the same consequences as violations of other current hiring rules. Furthermore, failure to comply with the regulations may result in fines imposed by the Labour Inspection Authority.

When do the rules come into force?

The approval scheme will come into effect on January 1st, 2024. However, there will be a transitional period until March 31, 2024. During this period, hiring from companies with pending approval applications will still be allowed.

Please feel free to contact us if you or your company have any questions regarding the hiring/leasing of labor or the new approval scheme.