Fines for two cleaning companies
The Dutch Labour Inspectorate (Nederlandse Arbeidsinspectie) has imposed fines totalling more than €700,000 on two cleaning companies, following inspections at various locations in Amsterdam and Zaandam, the Netherlands. According to trade media Facto.nl and AllesoverHR.nl, which cite the Labour Inspectorate as their source, the companies were fined separately €256,000 and €235,000 for violating the Minimum Wage and Minimum Holiday Allowance Act (Wet minimumloon en minimumvakantiebijslag). In addition, the inspectorate jointly fined the two companies €212,000 for violating the Foreign Nationals Employment Act (Wet arbeid vreemdelingen). A precautionary attachment has been placed on the assets of both companies.
Investigation launched after reports of under-the-table payments
The investigation began after reports came in that employees did not appear in the companies’ payroll records and were being paid in cash, according to Facto.nl. Pay slips, time records, employment contracts and proof of payment were missing for dozens of employees, making it impossible to establish whether they were paid at least the statutory minimum wage. It also emerged that 17 employees were working without a work permit or other valid authorisation, which likewise constitutes a violation of the Foreign Nationals Employment Act.
Investigation also under way into hotel chain and accountant
In addition to the two cleaning companies, the Labour Inspectorate is also investigating a hotel chain and an accountant involved in the case, according to AllesoverHR.nl. That investigation has not yet been concluded. During an inspection at a hotel location, inspectors found several bags of cash. For dozens of employees, it could not be established whether they were formally employed or received the statutory minimum wage. The Labour Inspectorate has not disclosed the names of the companies involved.
Objection and appeal possible
Companies fined by the Dutch Labour Inspectorate generally go through a set procedure: after a penalty report, the company first receives a notice of intent to impose a fine and the opportunity to submit a response within 15 days, according to the Labour Inspectorate’s website. If a penalty decision follows, the company can lodge an objection within six weeks, then appeal to the district court (administrative law division) and subsequently lodge a further appeal with the Administrative Jurisdiction Division of the Council of State. Whether the two cleaning companies in this case will make use of that option is not known.
Context
Minimum wage rules and payroll administration are largely regulated at national level, but common minimum rules exist within the European Union for employing staff without a valid residence or work permit. European Directive 2009/52/EC requires member states to sanction employers who illegally employ third-country nationals and to have them pay outstanding wages; the directive presumes an employment relationship of at least three months and holds main contractors jointly liable for unpaid wages owed by subcontractors, according to an analysis by migrant rights organisation PICUM. National laws such as the Dutch Foreign Nationals Employment Act give effect to these European obligations.
For HSE and compliance professionals worldwide, this case underscores that payroll administration and identity and permit checks are a standard part of labour inspections, even outside the classic safety themes. Organisations that work with cleaning, facilities or other subcontractors would do well to verify that hours, wages and employment relationships in their chain are demonstrably recorded and that staff are employed lawfully. As this case shows, a shortcoming can lead to substantial fines, asset seizure and investigations into other parties in the chain, such as clients and service providers.
Source: Dutch Labour Inspectorate, via Facto.nl, Over €700,000 in fines for two cleaning companies, and AllesoverHR.nl, Over €700,000 in fines for serious violations in the cleaning sector.
Prompted by: €700,000 fine for cleaning companies that paid staff in cash, nos.nl.
Further research: The Employers Sanctions Directive: a law to address exploitation of undocumented workers?, PICUM, and Penalty procedure, nlarbeidsinspectie.nl.
