Competition and illegal employment of foreign nationals

The admission of foreign workers can lead to unfair competition with Dutch workers. Foreign workers are also sometimes treated unfairly or employed illegally. The government monitors this closely.

Unfair competition and crowding-out

Foreign workers are often cheaper to employ than Dutch workers, for example if their employer does not observe the Dutch rules for collective labour agreements or pension contributions. This can lead to unfair competition and to Dutch workers losing their jobs. Similarly, self-employed foreign contractors may be competing unfairly if they do not observe the Dutch rules.

Unfair treatment of foreign workers

A small proportion of employers treat foreign workers unfairly. Unfair treatment includes:

  • paying foreign workers less than the statutory minimum wage;
  • failing to comply with collective labour agreements;
  • failing to contribute to employee insurance schemes.

Liability for unfair treatment of foreign workers

Businesses that recruit workers via non-certified employment agencies can be held liable if the workers receive less than the minimum wage. The workers can subsequently demand that their wages are raised retroactively to the minimum level. Employment agencies are certified by the Dutch Labour Standards Foundation (SNA).

Tackling misuse and fraud involving the highly skilled migrant scheme

The government has taken measures to tackle fraudulent and other misuses of the highly skilled migrant scheme. The IND can reject an application for a residence permit if, for example, the salary is disproportionately high for the position.

Tackling illegal employment

According to reports by the Inspectorate SZW, a relatively high number of foreign nationals work illegally in the horticulture, catering and construction industries. In order to curb illegal employment, the government has increased the financial penalties and taken measures to stamp out illegal employment practices. It has also simplified judicial procedures.

Higher fines for employing illegal foreign workers

A private individual who employs an illegal foreign worker risks being fined €4,000; a business risks being fined €8,000. If the Inspectorate SZW discovers another violation within 24 months, the fine will be increased by 100%. The Inspectorate SZW can impose fines without the Public Prosecution Service’s intervention.
The government has also substantially increased the fines for businesses that repeatedly break the law. Under the Social Affairs and Employment Legislation (Strengthening and Enforcement) Act, which entered into force on 1 January 2013, the government can even shut them down. The UWV can also refuse employment permits to employers who repeatedly break the law.