New fining policy Dutch Labour Authority

On 27 January 2025, the Minister of Social Affairs and Employment published new policy rules for fines under the Foreign Nationals Employment Act (“Wav”). Under this Act, an employer may need a work permit for work carried out by a non-EU national in the Netherlands. This permit must be applied for and obtained before the work begins. If the employee stays in the Netherlands for more than 90 days, a Combined Residence and Work Permit (“GVVA”) may be required.

If an employer allows a non-EU employee to work without the required permit, the Netherlands Labour Authority (NLA) may impose a fine. The NLA adopts a very broad interpretation of the terms “labour,” “employer,” and “employee” which means activities may more quickly fall under illegal employment.

The new policy rules follow a ruling by the Administrative Law Division of the Council of State, the highest court in Wav fine cases. On 13 July 2022, this judge ruled that the fine policy had to be adjusted. This article explains the main changes.

New standard amounts for fines

Based on the new policy, the following standard amounts for fines apply for violations of the Wav:

Illegal employment

• € 6,000 for legal entities
• € 3,000 for executives, individuals acting in the course of their profession, business or duties, and non-profit associations or foundations
• € 1,500 for individuals who have others perform work as a domestic or personal service

Failure to provide ID within 48 hours of a request by the NLA

• €6,000 for legal entities
• € 3,000 for executives, individuals in the course of their profession, business or duties, and non-profit associations or foundations
• € 1,500 for individuals who have others perform work as a domestic or personal service

Failure to report work that should have been reported

• € 1,500.00 for legal entities
• € 750.00 for executives, individuals in the course of their profession, business or duties, and non-profit associations or foundations

Failure to provide a copy of the employee’s proof of identity to de facto employer

• € 1. 500.00 for legal entities
• € 750.00 for de facto executives and natural persons acting in the course of their duties, profession or business

Failure by the de facto employer to verify the employee’s identity on the basis of the employee’s proof of identity

• € 1. 500.00 for legal entities
• € 750.00 for de facto executives and natural persons acting in the course of their duties, profession or business

Not retaining a copy of the employee’s proof of identity by the de facto employer

• € 1,500.00 for legal entities
• € 750.00 for de facto executives and natural persons acting in the course of their duties, profession or business

New policy on mitigation of fine amount

According to the old policy rules, the NLA used a list of specific mitigation grounds as a starting point when determining the fine amount. With the new policy rules, this list has been removed.

According to the new policy rules, the mitigation or increase of the fine amount depends on:

• the extent to which the offence can be blamed on the employer; and
• the severity of the offence

The starting point remains the standard amount for fines, assuming a normal degree of culpability and severity of the offence.

In case of gross culpability, the amount is increased to 125% and in case of intent the amount is increased to 150% of the standard fine amount. If there is reduced culpability, the fine is reduced to 50% of the standard amount. In addition, the fine amount can be increased by 25% if the violation is qualified as serious. Likewise, it can be reduced by 25% if the violation is less serious. This depends on the facts and circumstances. The application of the new policy rules is illustrated with the following example.

Example 1: Mitigation of fine amount
The NLA finds that legal entity X had one employee working illegally. X demonstrates reduced culpability, and that the offence should be considered less serious.

Standard amount: €6,000
Mitigation for reduced culpability (50%): €3,000
Additional mitigation for less serious offence (25%): €2,250

Example 2: Increase of fine amount
The NLA establishes that legal entity Y had one employee to working illegally. The NLA proves that Y did this intentionally and that the offence must be considered serious.

Standard amount: €6,000
Increase for intent (150%): €9,000
Additional increase for serious offence (25%): €11,250

Multiple employers in the chain

The Foreign Nationals Employment Act uses a broad concept of “employer”. This means that in cases of subcontracting or outsourcing, the fine is in principle imposed on all employers involved in the chain.

In practice, this means that employers must ensure that they comply with applicable laws and regulations when deploying workers from outside the EU.

Questions?
Do you have any questions about the new fining policy? Please feel free to contact us.

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