What is the news? Inspectorate SZW, a unit of the Netherlands’ Ministry of Social Affairs and Employment, SZW, has released its plan for 2019-2022, identifying the enforcement of laws against illegal employment as a key priority.

What does it mean? Employers in the Netherlands should anticipate that Inspectorate SZW will be putting a heavy focus on compliance with immigration regulations and increasing its resources to conduct inspections and investigations of illegal working.

Key points:

  • Inspectorate SZW’s plan for 2019-2022 is primarily aimed at achieving greater social impact and encouraging employers to comply with laws and regulations that protect workers and create a level playing field in the labor market.
  • The risks of illegal employment have increased with the scarcity of local labor and employers hiring more foreign workers, thus requiring the inspectorate’s extra attention to underpayment, exploitation, illegal employment and sham arrangements.
  • Inspection of illegal employment is a top priority. Illegal employment sees to the deployment of non-EU/EEA/Swiss nationals without complying with work authorization requirements of the Foreign Nationals Employment Act.
  • The inspectorate identified priority areas for inspection, such as: construction and infrastructure, cleaning, catering and employment agencies as well as recognized sponsors and self-employed persons.
  • The inspectorate’s budget will increase each year to strengthen enforcement efforts, beginning with an additional 13 million euros in 2018 and increasing incrementally every year to 50.5 million euros from 2022 onward. The additional budget will be used to recruit more inspectors and significantly increase the number of employers who will be inspected.
  • Cooperation with supervisory bodies operating in the European Union will be intensified. In the Netherlands, the inspectorate will work closely together with, for example, the Dutch Tax Authorities, the Employees Insurance Agency and the Immigration and Naturalisation Services.

Analysis & Comments: The plan gives employers notice that illegal employment is the inspectorate’s key priority and that the agency will be investing significantly in strengthening and increasing its enforcement efforts. As a result, the number of inspections of illegal employment will increase significantly. The focus will be on recognized sponsors and organizations offering services that companies typically outsource. The Dutch Foreign Nationals Employment Act defines an employer as the party who lets another person perform activities in light of the execution of duties, profession or office, irrespective of the availability of an employment contract between the party and person. It is the employer’s responsibility to ensure that appropriate and valid immigration documents for non-EU/EEA/Swiss nationals are in place. In addition, chain liability applies: all organizations within a chain of employers are responsible for legal deployment of foreign nationals and, can, in case of non-compliance, be fined for the same violation. Companies deploying foreign nationals in the Netherlands should anticipate more inspections by Inspectorate SZW. Recognized sponsors and companies that outsource services falling within the focus areas of Inspectorate SZW should be especially aware of the likelihood of inspections.

Employers are encouraged to conduct internal reviews to ensure that they are in compliance with immigration legislation. The inspectorate is authorized to impose significant fines and sanctions such as the cancellation of work authorizations, and may list inspection results on a publicly available website and shut down businesses where severe violations are found.

Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.