Expansion of administrative chain liability: more burdens on employers?

Expansion of administrative chain liability: more burdens on employers? 1000 667 SarisLaw

Administrative chain liability is seen by the legislator as an effective means of achieving compliance with laws and regulations. In November 2013, as part of the ‘progress report on bogus schemes‘, Minister Asscher of Social Affairs and Employment announced his intention to come up with measures to improve working conditions as soon as possible. One of these measures involves a so-called administrative chain liability for the payment of the statutory minimum wage. This means that, unlike today, not only the direct employer is held liable for payment of the minimum wage, but also all employers in the chain. If the direct employer does not pay the minimum wage (in full), for instance because he cannot be found or is bankrupt, all employers in the chain can be fined and/or ordered to pay a penalty. This means that if a contractor hires a subcontractor who then asks a third company to perform work at a construction site, all three parties may face enforcement action by the Minister. The question employers will be asking is how to ensure they do not face enforcement action? That is, as the practice of the chain liability of the Foreign Nationals (Employment) Act shows, a difficult question to answer. It is therefore to be hoped that the Ministry of Social Affairs and Employment will provide adequate information to companies so that they can take the necessary measures in time to avoid fines and/or penalty payments.

The full blog post is written in Dutch.

Date: 30 January 2004
Author: Christien Saris