Due diligence obligation ahead: postponement until 2026 and a focus on high-risk sectors

The many links on the road to chain liability

Belgian clients often call on foreign subcontractors from other EEA Member States or Switzerland. Because their employees are exempt from the requirement to obtain a work permit or residence permit, it is often assumed that their employment is legal.

However, extra vigilance is required when these subcontractors in turn call on workers from outside the EU – so-called third-country nationals. After all, stricter rules apply to this group with regard to right of residence and work permits.

Even though the primary responsibility lies with the foreign subcontractor, the Belgian client can also be held liable if it turns out that illegal employment is taking place in the contracting chain. In some cases, this can even lead to criminal consequences.

Tightening up the contracting chain to combat illegal foreign workers

Until now, the emphasis has mainly been on written declarations: a contractor could in principle avoid liability if he received a statement from his direct subcontractor that no illegally resident third-country nationals were being employed, provided that there was no evidence that the contractor was aware of the fact that his direct subcontractor was employing one or more illegally resident third-country nationals.

In practice, however, this proved to be solution only on paper, which undermined the arrangement. For this reason, a new due diligence obligation was introduced in the Flemish decree of 27 October 2023. From now on, (intermediary) contractors must actually request documents from their subcontractors, such as identity and residence papers of foreign employees or self-employed persons.

Our previous newsletter already provided an overview of these obligations. A simple clause in the agreement in which the subcontractor declares that they do not employ illegally resident third-country nationals would no longer suffice to exempt them from liability.

To facilitate the gathering of information, an application was to be developed in the course of 2024. It was to be operational by 1 January 2025, together with the implementation of the new rules. However, this schedule proved to be too optimistic. Various practical challenges meant that the rules on the due diligence obligation were postponed until 1 January 2026. In practical terms, it would also be impossible to offer such an application, so that companies will still have to request documents from their subcontractors.

Instead, a reporting desk will be set up where companies can easily report to the Flemish social inspection that the requested information is missing from the direct (sub)contractor.

Relaxation of the rules: only high-risk sectors

At the request of Minister Zuhal Demir, advice was sought from the Advisory Committee on Economic Migration regarding the scope of the new decree. Based on this advice, the new regulation was made both more flexible and more stringent.

Originally, the rules were to apply to all sectors, but this would have placed too heavy a restriction on the free movement of services. On the advice of the Advisory Committee, the legislator therefore opted for a phased approach. The high-risk sectors will be addressed first: construction (works on immovable property), cleaning, the meat sector and delivery services.

After interim evaluations, the scope will be extended to other risk-sensitive sectors, to the extent that this proves necessary.

For the construction (works on immovable property) and cleaning sectors, the threshold amounts that are also used for the Declaration of Works apply. The due diligence obligation does not therefore apply if: (i) the work amounts to less than 30,000 euros (excluding VAT) and is carried out by a contractor without a subcontractor, or (ii) the work amounts to less than 5,000 euros (excluding VAT) and there is only one subcontractor.

We will, of course, keep a close eye on further developments regarding the risk sectors for you.

But also a tightening…

The stricter liability for the employment of third-country nationals initially only applied to the relationship between the contractor and the direct subcontractor. However, the scope is now being extended to the relationship between the professional client and the direct contractor.

Natural persons who have works carried out for strictly private purposes are not subject to this.

Entry into force and preparation

The new rules will enter into force no later than 1 January 2026, with a planned period of grace of six months during which no penalties will be imposed. However, the preliminary draft Decree is now being submitted for advice to the Social and Economic Council of Flanders (SERV) and then to the Council of State.

It is strongly recommended that you already structurally incorporate requesting the documents into your daily operations as a construction company and that you align your compliance processes accordingly. If you have any questions, make sure to contact our specialists.