The Dutch Labour Market Fraud (Bogus Schemes) Act (Wet Aanpak Schijnconstructies: 'WAS') is to come into force in three phases. The first part entered into force on 1 July 2015. The second part will enter into force on 1 January 2016, to be followed by the third part on a date yet to be determined. The WAS envisions strengthening the legal position of employees by providing for the possibility to claim from principals of the employer to pay the agreed wage if they do not receive that (in full) from the employer. Below is an overview of the most important measures.

  • As from 1 July 2015, 'chain liability' will apply to the payment of wages which have been agreed between an employer and employee. Chain liability means that if there is a chain of employers (not necessarily in the same group of companies), the employee can hold all principals in the chain liable for payment of the wage to which he is entitled. The employee must first apply to his immediate employer or its principal. Both are jointly and severally liable for the wage to be paid. If the employee cannot collect the wage from them, for example, due to insolvency or they no longer exist, he can apply to the next link in the chain. Chain liability does not apply to principals who, as natural persons, do not act in a professional or business capacity (for example, a private person who has a house built for himself).
  • As from 1 July 2015, the names of enterprises which have received an administrative penalty for non-compliance with rules relating to the employment of foreign nationals or hiring out personnel via intermediaries are to be made public.
  • As from 1 January 2016, the statutory minimum wage may no longer be paid in cash. In order to avoid fraud or forgery, the part of the wage equal to the statutory wage at minimum must be paid by bank transfer.
  • As from 1 January 2016, it will no longer be permitted to withhold expenses relating to real costs (such as housing, work clothes and travel expenses) from the minimum wage. To promote compliance, employers will be required to specify on the payslips all elements which make up the wage, including expense allowances. Failure to do so could lead to a penalty being imposed by the Social Affairs and Employment Inspectorate (SZW).
  • In the future (date of entering into force is yet to be determined), names of enterprises which fail to comply with the regulations relating to the minimum wage and employment conditions will be made public.

Principals can take measures to protect themselves against potential claims of employees of contractors. Contractors would be wise to work with accredited contractors as much as possible. In addition, principals must include clear provisions in their agreements with contractors with regard to compliance with employment law regulations which the principals must duly observe. Principals are also required, if there are signs of being underpaid, to take adequate action against contractors by, for example, demanding insight into the wage payments, contacting the SZW Inspectorate or, if necessary, dissolving the agreement with the contractor.

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