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NETHERLANDS: Compliance and fines

The Employment of Foreigners Act (EFA) demands work authorization for any type of work by a foreign national (non-EU/EEA/Swiss) for companies or individuals in The Netherlands. Non-compliance may result in administrative fines. The applicable amounts are:

  • € 8,000 per employee for employment without adequate work authorization
  • € 1,500 per employee if no copy of the original ID is stored in the company's records
  • 150% of these amounts per employee for a repeated offense

There is no maximum amount; the fine is calculated mathematically on the basis of the number of employees in violation, regardless of how many hours they have worked or what their position in the company was. The EFA prescribes that every violation will be fined, without previous warning.

In case of secondment, both the seconding company and the client that actually employs the foreign worker will be fined; they are both separately liable and payment by one company does not liberate the other. In case of contracted work, even multiple companies can be fined; every company in the chain of contracts, from the principal to the last subcontractor, is liable for the same offense and will be fined the same amount.

The Modern Migration Policy Act, expected to enter into force some time in 2011, introduces another set of administrative financial penalties in addition to the ones noted above. Under this new law, companies will have a duty to inform the Dutch Immigration and Naturalization Service about all relevant changes; must commit to careful recruitment of highly skilled migrants; and must keep any relevant piece of information with respect to the foreign worker on record for a period of 5 years after the employment has ended.

Violations may result in the following administrative sanctions, to be imposed on the company:

  • a warning for a first offense
  • € 3,000 per employee for a second offense
  • € 4,500 per employee for a repeated offense
  • offenses of a very serious nature may result in blacklisting of the company and a temporary or even permanent ban from using the KMS

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