Thursday, 27 August 2026
Companies operating property and construction businesses in the Netherlands face potentially significant financial exposure when foreign nationals without the required authorisation are found working within their supply chains. The risk can extend considerably further than the company appearing on a worker’s employment contract, making outsourced cleaning, security, maintenance, logistics and construction labour an increasingly important compliance issue.
Under the Netherlands’ Foreign Nationals Employment Act, the Wet arbeid vreemdelingen (WAV), companies are generally prohibited from allowing foreign nationals who require work authorisation to perform work without the appropriate permit. For many workers from outside the European Economic Area and Switzerland, this means obtaining a work permit or combined residence and employment authorisation unless an exemption applies.
What makes the legislation particularly relevant to commercial real estate is its broad interpretation of who can be regarded as an employer. The concept is not confined to the company paying the worker’s salary or holding the employment contract. A business that enables or allows an individual to perform work can potentially fall within the legislation even where the worker has been supplied through another company.
That distinction creates particular exposure in industries built around extensive contracting chains. A major development can involve a developer, general contractor, specialist contractors, subcontractors and labour suppliers. An operating office, logistics centre, shopping centre or hotel can similarly rely on external companies for cleaning, security, catering, maintenance and other services.
If a worker within such an arrangement does not have the necessary right to work, enforcement does not necessarily stop with the worker’s immediate employer. Several businesses associated with the same work arrangement can potentially be regarded separately as employers and face their own penalties.
Recent enforcement cases demonstrate the financial consequences. According to the legal analysis accompanying the latest warning over WAV compliance, a freelance labour platform was fined EUR 66,000 over the deployment of foreign workers who were not permitted to work in the Netherlands, while nine companies using workers through the platform received combined penalties of EUR 80,500. In another case during 2026, a cleaning business received fines totalling EUR 28,500 following shortcomings connected with checks on workers’ documentation.
The cases are particularly relevant to property businesses because cleaning and other facilities-management services are routinely outsourced. A building owner, occupier or manager may have limited day-to-day involvement in recruiting the individuals who eventually arrive at a property, but contractual distance does not necessarily eliminate regulatory exposure.
The issue is better understood as multiple potential responsibilities rather than simply one company’s penalty being transferred along a supply chain. Dutch authorities can examine the position of individual organisations involved in allowing the work to take place and determine whether more than one qualifies as an employer for the purposes of the legislation.
Financial penalties can consequently accumulate quickly. The current starting point for a corporate infringement is EUR 6,000 for each worker employed contrary to the rules, while the amount can rise to EUR 11,250 per infringement depending on the circumstances and degree of responsibility. Repeated infringements can result in substantially higher penalties, with increases of 50%, 100% or, in some circumstances, 200% within the applicable repeat-offence period.
For a large construction project, the mathematics can therefore become significant. The presence of several workers without the appropriate authorisation can multiply the penalty exposure, while several businesses within the contractual structure may potentially face enforcement action arising from the same workforce.
A lack of knowledge about who a contractor has deployed may not provide sufficient protection. The Dutch Labour Inspectorate expects businesses to take active measures to establish who is performing work and whether the relevant immigration and employment requirements have been satisfied.
This changes the risk calculation surrounding outsourcing. Appointing a contractor may transfer responsibility for recruiting, scheduling and managing personnel, but it does not necessarily remove the client from questions concerning whether those people can legally perform the work.
For developers and construction companies, this makes visibility across subcontracting structures particularly important. Contractors may themselves appoint other businesses, while specialist trades can use temporary workers, labour agencies or self-employed contractors. The longer the chain becomes, the easier it can be for the party commissioning the work to lose sight of who is actually present on site.
Commercial property operations face a similar problem. Cleaning crews can enter buildings outside normal working hours, security personnel may be supplied by specialist contractors, and maintenance companies can use different technicians depending on availability. The individuals physically working within an asset may therefore change frequently without direct involvement from the property’s owner or occupier.
The legislation means businesses cannot necessarily rely exclusively on assurances contained in service contracts. Contractual provisions requiring contractors and subcontractors to comply with employment rules can form part of the control framework, but they do not automatically prevent regulatory action if an unauthorised worker is subsequently discovered.
Companies are therefore being encouraged to combine contractual controls with practical verification. This can include establishing the identities of people working at a site, checking relevant documentation before work begins, controlling further subcontracting and carrying out periodic inspections to determine whether the workforce actually present corresponds with the information supplied by contractors.
Using certified temporary-employment businesses and recognised registration systems can also strengthen procurement controls, although this does not provide an automatic exemption from responsibility. Similarly, contractual indemnities may help determine who ultimately bears financial losses between commercial parties but cannot prevent authorities from imposing a regulatory fine where an infringement has occurred.
The rules also contain important distinctions between different categories of foreign workers. Not every non-Dutch national requires the same employment authorisation, while some groups can work under exemptions or alternative procedures. In certain cases, a conventional work permit is unnecessary but an employer or contracting party may still have notification obligations.
The practical challenge for property businesses is consequently not simply determining whether someone is foreign, but establishing which rules apply to that particular individual’s status and the work being undertaken.
There can also be scope for reduced enforcement consequences in certain circumstances. Measures introduced following an infringement to prevent repetition can potentially contribute to a reduction in the financial penalty, while some first infringements involving a limited number of foreign nationals may qualify for a written warning rather than an immediate fine. These outcomes depend on the individual circumstances and should not be regarded as an alternative to preventative compliance.
The issue has broader implications for procurement across the property industry. Price has traditionally played a major role when appointing cleaning, security, maintenance and construction contractors. Increasing enforcement risk gives owners, developers and occupiers another reason to examine how suppliers recruit and supervise their workforce rather than evaluating bids solely on service and cost.
It could also place greater importance on transparency further down the contracting chain. A main contractor with strong internal employment controls provides limited protection if subcontractors can introduce additional workers without adequate checks. Developers and asset managers may therefore increasingly need to understand not merely their direct supplier but the structure through which labour ultimately reaches the property.
For institutional property owners, the issue also intersects with wider governance requirements. Investors increasingly expect asset managers to understand operational and supply-chain risks across portfolios. Employment compliance involving contractors may consequently become part of the wider scrutiny applied to procurement and facilities-management practices.
The central lesson for Dutch commercial property is that outsourcing labour and outsourcing legal exposure are not necessarily the same thing. A company may never have recruited a worker, negotiated their pay or even know their name before they arrive at a building or construction site, yet its role in allowing that work to take place can still become relevant under the WAV.
For an industry dependent on extensive networks of contractors and service providers, that makes workforce visibility increasingly important. One unauthorised worker can represent more than an employment problem for the company directly hiring them; the consequences can travel through several layers of the property supply chain, potentially leaving multiple businesses facing separate regulatory exposure.
Source: CMS
