Free movement of employees
The rules for permitting foreign nationals to work are set out in the Foreign Nationals Employment Act (Wet arbeid vreemdelingen or Wav). Working in the Netherlands is freely permitted for people with Dutch nationality or the nationality of one of the member countries of the European Economic Area (EEA) and Switzerland. The EEA comprises all the countries of the European Union plus Norway, Iceland and Liechtenstein. In all these countries a free movement of employees is permitted.
People with a different nationality can only work in the Netherlands if:
- they have a valid residence permit, which includes the note: ‘Employment is freely permitted. Employment permit not required.’;
- they hold a valid passport with an officially accepted sticker for residency remarks, and which includes the remark: ‘Work is freely permitted. Work permit not required.’;
- the employer has a valid work permit for this foreign national.
The Foreign Nationals Employment Act bans employers and private individuals from allowing foreign nationals, who do not have free entry into the Dutch labour market, to work for them without a valid work permit.
The deployment of illegal workers is at the cost of legal workers, who will find it more difficult to gain employment. Moreover, illegal workers are often underpaid and the payment of their social security premiums and taxes evaded by their employers. This leads to unfair competition with bona fide employers.
An employer who employs one or more foreign nationals without the necessary work permit risks a heavy fine: EUR 8,000 per illegal worker. Private individuals risk a fine of EUR 4,000 per illegal worker. Fines of up to EUR 12,000 per underpaid employee will be imposed for paying less than the minimum wage and minimum holiday allowance. In the event of repeated violations the fines increase considerably. Since the Social Affairs and Employment Stricter Enforcement and Sanctions Act came into force on 1 January 2013, the Netherlands Labour Authority can also decide to suspend work activities. You can read more about this subject on the page Enforcement and penalties.
In cases of suspected (organised) illegal work, the Netherlands Labour Authority can set up a criminal investigation. Examples of illegal work include constructions that are designed to circumvent or evade legislation and regulations, or illegal work by fraudulent intermediaries. The aim of criminal proceedings is to bring the accused to justice and to retrieve the money that was earned through the fraud.