The Netherlands Labour Authority has imposed administrative fines totalling over 700,000 euros on 2 cleaning companies. The companies violated the Dutch Minimum Wage and Minimum Holiday Allowance Act (WML) and the Dutch Foreign Nationals (Employment) Act (Wav). During the investigation, the Labour Authority levied prejudgment attachment on the assets of the companies so as to be able to collect the fines.
The investigation began following reports that workers who were not listed in the payroll records were being set to work and were being paid in cash by the cleaning companies. This led to inspections at several companies in Amsterdam and Zaandam: a hotel chain, its accountant, and the 2 cleaning companies concerned. The investigations into the hotel chain and the accountant have not yet been completed.
Payment in cash
During the inspection at the hotel, the labour inspectors discovered some unusual items, such as 'multiple bags of cash'. It also emerged that workers were being paid in cash. For reasons of monitoring payment of the minimum wage, such is not allowed in the Netherlands.
No way of verifying whether the minimum wage had been paid
The companies were unable to provide complete records with respect to dozens of workers. Important documents, such as payslips, timesheets, employment agreements, and proofs of payment, were missing or incomplete.
Fines for underpayment
As a result, the Labour Authority was unable to verify whether the workers had received the statutory minimum wage and the correct holiday pay. Employers are obliged to keep accurate records of this information and to make it available if the Labour Authority requests submission thereof. The following fines have been imposed for these offences: one cleaning company was fined 256,000 euros and the other was fined 235,000 euros.
Society prejudiced
Without proper payroll administration, it is not only the workers who are prejudiced: so is society as a whole. Without proper payment of contributions (for example for pensions) and employee insurance, less tax is paid and the Labour Authority is unable to determine whether workers are being treated fairly.
Workers working without the correct permit
In addition, the Labour Authority found that a total of 17 workers were carrying out work without holding the required permit to work for this employer. In doing so, the companies were violating the Dutch Foreign Nationals (Employment) Act. Before work commences, employers must check whether a worker is permitted to work in the Netherlands and whether they require a work permit or other valid authorisation. The 2 companies have been fined 212,000 euros in total in this connection.
Prejudgment attachment
During the investigation, the Labour Authority imposed prejudgment attachment. This is a measure taken to prevent assets from being disposed of before a penalty decision becomes final. This ensures that it remains possible to actually collect the fines imposed once they become final.
A fair labour market requires compliance with the rules
Maintaining proper payroll records is essential for ensuring that workers receive what they are due. When employers do not have their records in order, the Labour Authority is unable to determine whether workers have been paid fairly. Setting people to work without holding the correct permits also prejudices the fairness of the labour market and leads to unfair competition.
The Netherlands Labour Authority takes action against employers who do not comply with labour laws. In doing so, it protects workers against unfair treatment and hence contributes to fair working conditions and a level playing field for entrepreneurs.
Reporting helps!
Reports of underpayment, illegal employment, or other abuses can help identify and tackle violations of the law. Anyone who suspects that labour laws are being violated can report this to the Netherlands Labour Authority. Reports and tips are important when it comes to identifying and tackling instances of abuse.
Reports can be submitted using the notification form on the Netherlands Labour Authority website. Additional information on fair working practices can be found at zelfinspectie.nl (Dutch).