Companies have broken the rules in tens of thousands of cases by employing foreigners illegally. The labor inspectorate is sounding the alarm, reports the FD. Despite fines, they still end up cheaper than if they hired a regular worker. “The payback period is minimal,” says FD editor Lien van der Leij.
Companies recruit illegal workers en masse and take fines for granted
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‘The advantage of not working according to the rules is very great in most cases,’ says Van der Leij. ‘A fine is currently a maximum of 8,000 euros.’ This is imposed in the event of a violation of the Foreign Nationals Employment Act (Wav), whereby people from outside the EU are working without a residence permit or work permit. The labor inspectorate is raising the alarm because so many companies ignore the rules.
‘In almost all cases there was a fairly significant benefit from paying the fine’
According to the editor, the labor inspectorate looked in sectors where the practice is known to be common. ‘The inspectorate then carefully investigated 24 cases and looked at what the employer would otherwise have had to pay in salary and premiums. In almost all cases there was a fairly significant benefit from paying the fine. The inspectorate has calculated that the benefit from evading taxes and premiums is about 60 percent. Even if they are fined, the payback period is minimal.
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Saved 38,000 euros
Sectors where evasion is common are the meat processing industry, agriculture and horticulture, construction, and even in the installation sector. In one case, an Asian restaurant was able to save 38,000 euros by illegally employing a chef who was paid thousands of euros in cash every month. ‘Then 8,000 euros is a pittance.’
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According to Van der Leij, no agreements were made when the law was introduced in 2015 to index it for inflation and prosperity. ‘That’s why it’s so eroded. If the law had not been eroded by inflation, such a fine would now be something like 15,000. According to the labor inspectorate, this must happen at a minimum. The inspectorate also believes that you should look at the extent of the benefit that has been achieved. If the fine took this into account a little more, it might have a deterrent effect.’
