The scale of identity fraud is still underestimated. Tens of thousands of forged documents are in circulation, used for purposes such as concealing illegal labor, performing various financial (banking) transactions under a false name, or gaining unauthorized access to (secure) buildings.
Employers in the Netherlands may only hire workers whose identities they have verified and who are legally permitted to work in the country. Which identity documents are valid for this purpose? Who is authorized to work in the Netherlands under the Foreign Nationals Employment Act (WAV) and the Posted Workers in the European Union Employment Conditions Act (WagwEU)? Properly verifying valid identity documents and the associated work permits for employees is complex and often poorly implemented. This article covers legislation and regulations, the steps required for verification, business risks, and potential solutions for proper onboarding and verification.
Right to Work
Anyone wishing to work in the Netherlands requires a valid ID. For nationalities outside the EEA (European Economic Area), the Right to Work (RTW) check applies. Who may perform work in the Netherlands, when, and for how many hours depends on their nationality and work permit status. All employers in the Netherlands may be subject to the Foreign Nationals Employment Act (WAV). When they employ foreign nationals, the WAV generally requires a work permit (TWV). Identity documents valid in the Netherlands are specified in the Compulsory Identification Act (WID). The WID itself does not define criminal offenses but specifies which documents are valid in the Netherlands. However, the WID does establish obligations regarding verification, record-keeping, and duty of care.
Under the WAV, an employer is required to verify the identity and work authorization of individuals before they begin work. To comply with this, an employer must follow a series of steps.
Verification compliance roadmap
(source: Labor Inspectorate)
- Identity document check: The worker must be able to present a valid, original identity document (not a copy). The employer is required to verify the authenticity and validity of the document.
- Identity verification: The employer must confirm that the identity document actually belongs to the person being hired (ensuring it is not a look-alike).
- Work authorization check: Next, it must be determined whether this person is actually permitted to work in the Netherlands. Due to the variety of passports, identity cards, Dutch residence permits, endorsements, and visas, this is far from simple. There are approximately 450 different models that may be used as valid identity documents in the Netherlands and that also provide immediate insight into work authorization (source: PG Support).
- Record-keeping obligation: Employers must keep an electronic or paper copy of the identity document of people they hire. When hiring temporary labor, the actual employer of individuals from outside the EEA and Switzerland who are not directly employed by them must also include a copy in their records and retain it for five years. In other cases, GDPR regulations actually prohibit this.
High business risks associated with identity fraud
Identity fraud is a major social problem in the Netherlands. Although identity fraud within organizations often occurs unintentionally, the Labor Inspectorate does not distinguish between deliberate fraud and a "mistake." This can severely impact the finances of both organizations and the individuals involved. Identity fraud involves chain liability, meaning that the worker's employer, any employment agency (UZB), and even the client where the work is being performed can be held liable for a failed verification. Everyone in this chain receives a fine per worker. These fines start at 8,000 euros per person and can escalate significantly with multiple verification errors. Even if a valid WID document is missing from the records, it results in a fine of 2,250 euros.
An even greater problem for an organization is the reputational damage incurred if it turns out that WID compliance was not properly executed. Once it becomes known that fraud has occurred, clients may cancel contracts and certifications may be invalidated. In the long run, the loss of trust may be more damaging than the financial fines an organization must pay. Naturally, identity fraud also has consequences for the individual involved.
Mitigate business risk with accurate verification
Mistakes happen easily. Many organizations lack the specialized knowledge and continuous monitoring required to properly perform Right to Work checks and identity verification. It is a complex process that can be simplified through automated ID verification via a controlled workflow and the support of specialists. They can quickly assess whether a new employee is legally permitted to work the required number of hours for the organization in the Netherlands. Investing in thorough employment screening promotes a fair labor market and prevents significant business risks.
Ready to Work
Want to learn more about Ready to Work? For questions, please contact one of our ID verification experts.
