Labor Market

Letterbox companies require a strong counter policy

In an article in the Dutch quarterly Zeggenschap (Vol. 1-2017) Jan Cremers of Tilburg University reports on research of the use of artificial corporate entities in cross-border recruitment of labor. Cremers takes a stand for a strengthening of the competences of the supervising authorities in the host country with regard to the control of the genuine character of the freedom of establishment and the related free movement.

The research focuses on the role of letterbox companies in the bypassing of mandatory social provisions and other workers’ rights. In the past decades a complete new industry has been erected of business consultants that can explain, in the search for cheap labor, what is perfectly legal in the circumvention of the national regulatory framework.