Enforcement policy Foreign Nationals Employment Act

Brief explanation of the enforcement policy under the Foreign Nationals Employment Act

1. Where to find what?

   1. The Foreign Nationals Employment Act (Dutch) sets out the rules that apply when employing foreign nationals. Foreign nationals are all those with a nationality other than Dutch, Swiss or any other nationality the countries of the European Economic Area (EEA).

   2. Policy rules on the imposition of fines under the Foreign Nationals Employment Act

      The Policy rules on the imposition of fines under the Foreign Nationals Employment Act (Dutch) contain all the rules for imposing fines and the amount of the fines. More information about the fine amounts (Dutch) when violating the Foreign Nationals Employment Act can be found here.

   3. Foreign Nationals Employment Act notification regulations

      The Foreign Nationals Employment Act notification regulations (Dutch) contain all the information on the obligation for employers to notify that a foreign national will perform work in the Netherlands. The employer makes this notification to the Employee Insurance Agency (UWV).

   4. The Foreign Nationals Employment Act Implementation Decree

      The Foreign Nationals Employment Act Implementation Decree lists the situations in which a work permit and/or a combined work and residence permit (single permit) are not required.

   5. The Foreign Nationals Employment Act Implementation Regulations

      The Foreign Nationals Employment Act Implementation Regulations (Dutch) contain all rules on granting, extending or revoking a work permit.

2. What does the Netherlands Labour Authority do?

   1. The Labour Authority monitors compliance with all labour market fraud laws, including the Foreign Nationals Employment Act. If a violation is found, the Labour Authority can enforce it by imposing a fine or sanction.

   2. Grounds

      The Labour Authority can have various grounds for carrying out an inspection, for example following a report from third parties, but also on its own initiative based on risk analyses. A re-inspection following a previously detected irregularity can also be a reason to investigate an employer.

3. Enforcement policy: What does the Netherlands Labour Authority do in case of a violation?

   1. The Labour Authority can use various enforcement tools in the event of a violation. The enforcement tool is determined based on the type of violation, the severity of the violation and whether the violation is a first violation or a repeat violation. Several violations are outlined below, along with a description of the enforcement that follows.

   2. Illegal employment

      If an employer is found to be employing foreign nationals without a valid work permit, the employer will be fined for each illegally employed worker. The standard fine amount may be moderated or increased under certain circumstances. More information about the fine amounts (Dutch) when violating the Foreign Nationals Employment Act can be found here.

   3. Violation of the obligation to establish a worker's identity

      Employers are required to establish the identity of each worker and include a copy of the identity document in their records. During an inspection, the inspector of the Netherlands Labour Authority is authorised to ask for a valid identity document on the spot. If the employer cannot show a valid identity document of the worker and there is no other way to establish this worker’s identity, the employer will be required to establish the worker's identity within 48 hours. If the employer cannot fulfil that obligation, the employer will be fined.

   4. Violation of the hiring/supplying employer's obligation to retain an identity document

      Sometimes it happens that an employer supplies workers to another employer. In that case, additional obligations apply when work is performed by foreign nationals: workers who are not Dutch nationals, nationals of an EEA member state or Swiss nationals.

      This is the case with temporary employment agencies, for example. In this case, the supplying employer is obliged to send the hirer a copy of the identity document of the supplied foreign national. The hirer is then obliged to establish the identity of the foreign national on the basis of this copy, record the copy in its records and is obliged to keep the copy of this identity document in its records for 5 years. If this obligation is not met, the Labour Authority will impose a fine.

   5. Violation of the obligation to notify

      Foreign nationals are generally not allowed to perform work in the Netherlands without a valid work permit. There are certain exceptions to this, where a work permit is not required. These situations are described in the Foreign Nationals Employment Act Implementation Decree 2022.

      In addition, there are situations where no work permit is required, but the employer has an obligation to notify the Employee Insurance Agency (UWV). This obligation to notify applies to the situations listed below:

      • Students at the Amsterdam Academy of Architecture.
      • Foreign nationals transferred within a company and foreign nationals holding a residence permit within the meaning of the ICT Directive (2014/66/EU).
      • Foreign nationals working in the context of International Trade.
      • Foreign nationals residing under the Temporary Protection Directive (2001/55/EC).

      The employer must submit a notification to the UWV no later than 2 working days before the start of the work. A fine will be imposed on the employer if investigations show that the obligation to notify has not been met, or has not been met in time and/or in full.

   6. Situations leading to a warning

      A warning is only given in exceptional situations where certain conditions are met. These conditions are: The violation must be a first violation of Section 2 of the Foreign Nationals Employment Act by the employer, within a 5-year period. Moreover, this may only be the only violation and the violation may relate to no more than 1 foreign national. Finally, there must also be no circumstances that increase the fine as mentioned in Section 2 of the Policy rules on the imposition of fines under the Foreign Nationals (Employment) Act 2020.

      If the above conditions are met, then a warning will be issued and no fine will be imposed in the following 4 situations:

      1. The employer can demonstrate that a work permit was received and entered into force no later than 2 days after the commencement of the work.
      2. If work is performed by a student and the permitted working hours of up to 16 hours are exceeded once only during a continuous period of 4 weeks and the working hours are exceeded by no more than 8 hours.
      3. The employer has demonstrably ended the illegal employment prematurely within 1 month after the work started and has reported this to the Labour Authority within the same period. This exception only applies if the employer reports this prior to any inspection by the Labour Authority or the police.
      4. A foreign national who has performed work once, without being paid and for a short period of time has a demonstrable family relationship with the employer.

   7. Shutdown of operations in case of repeated violations

      In some cases, the Labour Authority may give a warning involving a potential preventive shutdown of operations. The Labour Authority will not proceed with this without good reason. There are 2 situations where the Labour Authority could give such a warning. These situations are:

      1. Serious violations
         In case of a serious violation, the Labour Authority will already give a warning involving a potential preventive shutdown of operations when the 1^st violation is established, in addition to preparing a fine report. This is done in order to give the Labour Authority the power, in case of a 2^nd identical or similar violation within 10 years, to give an order for a preventive shutdown of operations. When 20 or more illegally employed foreign nationals are found, this constitutes a serious violation within the meaning of the Foreign Nationals Employment Act.
      2. Other violation
         In case of other violations (so not the previously mentioned serious violations), the Labour Authority will draw up a fine report for the 1^st violation. If an identical or a similar violation is established again within 5 years, the Labour Authority will again issue a fine report and the employer will be given a warning involving a potential preventive shutdown of operations. In case of a 3^rd identical or similar violation within 5 years, the Labour Authority may proceed to shut down the operations.