Dutch Labor Inspectorate (NLA)

The Dutch Labor Inspectorate can impose fines for violating various laws, including the Foreign Nationals Employment Act (also known as the WAV). The WAV stipulates that employers are prohibited from employing a foreign national without having a work permit for the employee or without the employee holding a residence permit that allows them to work.

Simply having a residence permit is not sufficient to assume that a foreign national may work. The residence permit must explicitly grant permission to work, usually indicated by the note on the residence card stating “work freely allowed, no work permit required.” If this note is absent or if the foreigner holds a residence permit from another European country, you risk a WAV fine. A wage employment relationship is not always necessary for a WAV fine to be imposed. Note that even unpaid work, such as internships or volunteer work, can lead to a fine if the employer and/or the foreign national does not have permission.

A WAV fine (violation of the Foreign Nationals Employment Act = WAV) can be imposed for illegally employing a foreign national. The Dutch Labor Inspectorate (NLA) is responsible for enforcing the WAV (as well as other legislation such as the Minimum Wage Act and the Working Hours Act).

In addition to the WAV, the labor inspectorate also enforces the Minimum Wage and Holiday Allowance Act (Wml) and the Working Hours Act (ATW). The Wml ensures that all employees receive at least the statutory minimum wage. The ATW ensures that employers do not impose unreasonable working hours without sufficient rest periods and that minors are deployed at appropriate working times.

Labor Inspectorate Fine

The current WAV fine for illegal employment is €8,000 for professional or business employers and €4,000 for private employers. This can increase to €12,000 and €6,000 respectively in case of repetition.

Each violation is fined. A fine of €8,000 can be imposed for each illegally employed foreign national. With multiple employees, the fine can quickly become substantial.

If an employer receives a WAV fine, they may also be barred from being a recognized sponsor for the skilled migrants scheme for five years. If the employer is already a recognized sponsor, a WAV fine might result in losing this status. It will also become more challenging for future employees to obtain a work permit (also known as GVVA).

Imposed fines will be published in national newspapers, alerting partners and associates to the WAV fine.

For underpayment of employees and non-compliance with the Working Hours Act, the labor inspectorate can impose significant fines. The amounts of the Wml fines can vary depending on the duration of employment and the severity of the violations. The penalty amounts can also be increased in case of repeat offenses.

Chain Liability and Labor Inspectorate Fine

In enforcing the WAV, the concept of chain liability is applied. Chain liability means every link in a chain (client-contractor-subcontractor-sub-subcontractor) is fully responsible for any detected illegal employment. If a subcontractor employees an illegal worker, the subcontractor, contractor, and the client’s principal will each be fined €8,000 (in this example, 3 x €8,000). Even if the client complies with their obligations under the WAV, a subcontractor’s violation can still affect them if they cannot prove they did everything possible to prevent it.

What can Arslan|Lit do for you?

We can assist you in various ways.

  • Obtaining the right residence or work permit: If you are considering hiring foreign employees, we can explore the possibilities. For higher-paid roles, the skilled migrants scheme or the Blue Card is often used. For skilled or mid- to lower-level staff, the GVVA or Cross-Border Service provision is commonly utilized.
  • Compliance: Prevention is better than cure! Arslan|Lit can help ensure you comply with the WAV. Unfortunately, many of our clients encounter WAV fines despite best intentions, often due to (sub)contractors violating the WAV (chain liability). We can review the residence situation of foreign employees with you and your partners to determine whether they may work and under what conditions.
  • Contesting fines: If you have had an inspection by the Labor Inspectorate or an investigation is ongoing, Arslan|Lit can contest any potential fines. Fortunately, there are mitigations that can significantly reduce the fine. It can also occur that illegal employment is wrongfully alleged, or that the Labor Inspectorate cannot prove it.

If you are dealing with a fine from the labor inspectorate and wish to object, or want to know how to prevent such fines, contact one of our lawyers at phone (020-2232466) or email (info@arslanlitadvocaten.nl). We are happy to assist you!