Employers’ liability when hiring non-EU workers

Pay attention to strict regulations, even when using employment agencies 

In recent years, Dutch companies have increasingly relied on undocumented workers, with news reports highlighting a rise in the employment of non-EU workers without proper permits. Such violations can have grave consequences for employers, including hefty fines. In that context, it is essential to understand the Foreign Nationals Employment Act (hereinafter “Wav”) to ensure compliance. What must employers do when working with non-EU employees in the Netherlands? And be warned: even when hiring through external agencies, you remain liable. 

Foreign workers in the Netherlands: The legal framework 

EU workers have free access to the Dutch labor market. For non-EU employees, however, strict rules apply. Under the Wav, employers must meet two key obligations: verifying the employee’s identity (identificatieplicht) and obtaining a valid work permit (tewerkstellingsvergunning). Non-compliance with these requirements can result in severe penalties. These regulations aim to prevent illegal employment and protect labor market integrity. 

The identification obligation 

Employers are required to verify and record the identity of all employees, whether they are from the EU or outside it. For non-EU employees, it is particularly crucial that both the formal employer (e.g., employment agency) and the actual employer (e.g., client or contractor) maintain a copy of a valid identification document. This requirement ensures that only individuals with the proper credentials are permitted to work. 

The work permit 

In most cases, non-EU employees must have a valid work permit before starting employment in the Netherlands. It is the formal employer’s responsibility to apply for this permit. There are limited exceptions to this rule. Employers who fail to secure the required permit may face substantial fines, which are often imposed per employee. 

Important: Who is considered an employer under the Wav? 

The Wav takes a broad view of what constitutes an “employer,” leading to confusion in practice. Both formal employers, such as employment agencies or subcontractors, and actual employers, such as clients or hiring companies, are considered employers under the law. This means that both are held accountable for meeting Wav obligations, including retaining copies of identification documents and, where necessary, securing work permits. 

The situation becomes more complex when non-EU employees are indirectly engaged, such as through an employment agency, payroll company, or subcontractor. While the formal employer is responsible for arranging work permits and providing copies of identity documents to the actual employer, the actual employer must verify and store these records. Issues often arise when one party fails to fulfill its responsibilities or lacks insight into the other party’s compliance efforts. 

In some cases, the actual employer may not have full visibility into who is performing the work, especially when personnel are hired through multiple layers of subcontractors. If a non-EU worker is found to be working without the required permit or documentation, both the formal and actual employers may face severe consequences. 

Consequences of non-compliance 

Failure to comply with Wav requirements can lead to serious repercussions. Employers risk fines calculated per infringement and per employee. For example, if both an identification document and a work permit are missing for one employee, multiple fines may be imposed. Repeat or serious violations may even result in criminal prosecution for economic offenses. 

The Dutch Labor Inspectorate (Arbeidsinspectie) also has the authority to review historical records. Employers are required to retain documentation related to non-EU employees for at least five years after the calendar year in which their work ended. Failure to maintain proper records can not only result in financial penalties but also damage your company’s reputation. 

Global mobility specialists at Crowe Peak  

The regulations under the Foreign Nationals Employment Act are complex and demanding. Do you want to ensure your organization fully complies? The global mobility specialists at Crowe Peak are here to advise and assist. Contact us today for tailored support.