On July 15, 2016, new fining policies for violation of the Dutch Foreign Nationals (Employment) Act were introduced. No longer will violation of work permit requirements automatically trigger a € 8,000 standard penalty. Instead, the circumstances of each case may dictate a lower sum.
Former fining policies
Based on the 2013 fining policies, when companies had a foreign non-EU national perform activities in the Netherlands, without having met the applicable work authorization requirements (i.e. having the required work permit in place), they risked facing a penalty of € 12,000.
Further to an October 2015 ruling of the Administrative Jurisdiction Division of the Council of State, the Dutch Minister of Social Affairs and Employment reduced the standard penalty sum to € 8,000. The Council of State had ruled that the previous standard penalty of € 12,000 was unreasonably high, stating that such an amount should be reserved for persistent mala fide companies. For other companies, differentiated fining policies should be considered instead.
New fining policies
The new 2016 fining policies introduce the differentiation sought in connection with the aforementioned ruling. Having a foreign non-EU national perform work activities without the required work authorization will no longer trigger a standard € 8,000 penalty. Instead, the following penalties will apply in case of a violation by:
- a natural person who has a foreign national perform domestic/personal services: € 2,000
- a natural personal who acts by virtue of his/her office or profession or business: € 4,000
- a foundation or association of public utility (not for profit organisation), when activities are performed in a non-business setting: € 4,000
- a de facto director/supervising official who directs the unlawful activities: € 6,000
- other legal entities and those considered equivalent thereto: € 8,000
Note: Penalty increase/moderation
The above penalties can be increased by a factor 1.5 in case of the following non-cumulative circumstances:
- repeated violation within a period of five years;
- the foreign national does not have residence authorization in the Netherlands (i.e. a residence permit);
- the company knowingly committed the violation;
- the violation involved more than three individuals; and
- the company in violation is led by a representative who was previously responsible for another penalized company, the business location and activities of which remained the same.
Penalty moderation can be considered (of 25%, 50% or 75%) in case of mitigating circumstances (e.g. regarding culpability and the gravity of the violation).
Under certain very restricted circumstances, a one-time violation can be settled by means of a warning instead of a penalty. This exception will hardly ever apply.