The IND has communicated their view on the ongoing issue of official passport pictures, most recently in the Knowlegde migrant newsletter of April. As from Thursday 1 May 2008 the IND has started keeping strictly to "the requirements". Pictures, to be used for residence documents, which do not qualify, "will not be accepted". Practitioners are left wondering to which extent this is a policy change, as the passport requirements do not find a basis in the law.

In 2007, 5,376 foreign workers applied for a permit under the Knowledge migrant scheme (KMR scheme), of which 5,175 were granted. This is a significant increase in relation to 2006 when some 3,600 KMR permits were granted.  In terms of applications handling and processing the IND keeps up the good work and generally operates quickly and adequately.

Intracompany transfer scheme

The intracompany transfer scheme (ICT scheme) subsist along with other work permit schemes, as the KMR scheme is inadequate under various circumstances, e.g. in cases where the KMR salary requirement cannot be met. For employees from countries with substantially lower salary standards like India or China this is frequently an issue. The ICT scheme allows for per diems and other in natura compensation elements to be taken into account, permitting the company to leave the salary scheme in the country of origin unaffected. The ICT scheme remains useful also for (e.g.) start-ups, companies who transfer staff for the first time, and companies who do not have a legal entity or payroll in the Netherlands (as mentioned above).  It should be noted that the Labor Office (CWI) anticipates a policy change in the sense that per diems and in natura compensation will no longer be taken into account, which would seriously limit the scope of the ICT scheme.

The increase in Knowledge migrants permits has not led to a substantial drop in the number of for regular labor-related residence permits (i.e. with work permit requirement) which remains steady at some 3,000 permits granted.

Compliance

Minister P.H. Donner of Social Affairs and Employment has announced an expansion of the staff of the Labor Inspection. Audit numbers once again increased from 8,000 per year in 2006 to 11,000 in 2007, the number of fines imposed increasing from 2,200 to 3,000. The average amount imposed was Euro 16,500 which equals some 2 illegal employees per case. Since 2007 fines of up to Euro 6,700 are applicable to evasion of the statutory minimum wage.

Some 1,500 employers requested a review of the sanction, however seldom with success. Case law on compliance is abundant, but the superior judge, the State Council maintains a strict approach. In the rare event that a District court grants the claimant a moderation of the fine, the Labor Inspection is likely to appeal against the verdict and typically will find the State Council at its side. Central issue for employers is the impossibility in the law to adapt the amount of the fines to the circumstances of the case. By way of an example: a flower-binding company was fined with Euro 168,000.- for employing 21 Polish workers. The audit took place in 2005 around Valentines day, the company's highlight of the year, requiring them to employ three times the normal number of staff. No local staff was to be found for this type of work so the employer restorted to Polish applicants. Under the circumstances - the increased fines had been implemented in the law only weeks before the audit and the rights of Polish workers were quite unclear for many employers in 2005 - the District court moderated the fine to Euro 40,000.-. The State Council annulled the verdict, considering that the statutory amount of Euro 8,000 reflects all special circumstances.

Another issue is chain responsibility: fines will be imposed on all companies involved in a project, from minor contractors dealing with a small part of work, all the way up to the principal, be it a major development company or even the State, contracting out major infrastructure assignments, and having all but no control over the access to the building site. All parties in the chain of assignments are fined with the same amount which can lead to op to 5 or even more fines for the same facts. Case law on this aspect so far is not conclusive. In a recent case the employer was succesfull by claiming that it is customary that constructors in the superior part of the chain pass on the fines imposed on them to their contractors. Contractors only rarely challenge such on-charging, fearing to jeopardize the granting of future contracts. The contractor in fact pays twice: not only his own fine, but also the fine of his principal. Contractors in the bottom of the chain may in effect be stuck with several times the amount of the original fine. The District court of Rotterdam ruled on 1 April 2008 that therefore the fine on these contractors should be set at nil. The Labor Inspection is expected to appeal with the State Council.

The State Council did rule favorably on 5 April 2008 in a case where the employee was located on site and without work permit, but was said to be waiting for the new work permit to be granted. Whereas the presence of the employee generally leads to the irrevocable assumption that he or she was actually working, the State Council's decision affirms that the Labor Inspection has to substantiate the fact that the employee was actually working.

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