The High Administrative Court approves IND financial penalty policy

On 26 November 2018, the High Administrative Court ruled for the first time on the Immigration and Naturalisation Service (IND) policy on fines for recognised sponsors. The ruling is relevant to employers who use the recognised sponsorship to apply for a residence permits for highly skilled migrants, intra-corporate transferees and EU Blue Card holders. As recognised sponsors, such employers are subject to the duty to inform and care.

The ruling concerns an au pair agency that mediates and matches au pairs with host families. According to the IND, the au pair agency violated its duty of care and information and was fined for it. The au pair agency was accused of not carefully selecting the host family and not being well-informed of the au pair's health and wellbeing. According to the IND, the au pair agency also failed to report on time that the host mother no longer resided at the family address.

What compliance duties are there under the Aliens Act? To use the accelerated admission procedure, employers must be recognised as sponsors by the IND. The recognised sponsor is subject to three duties under the Aliens Act: a duty to administrate, a duty to inform and a duty of care.

In a nutshell, the duty to administrate means that the recognised sponsor must have all relevant information and documents of the employee in their administration. The duty of information means that the recognised sponsor must report any relevant changes in the foreign national's position to the IND within 28 days. Relevant changes affecting the recognised sponsor, such as a change of the company address, must be reported within 14 days. Finally, the duty of care requires that the recognised sponsor has carefully selected and recruited the foreign national and has informed the foreign national of his rights and obligations in the Netherlands. The IND may fine failure to comply with these obligations.

The IND maintains a differentiated penalty policy. The main rule is that the recognised sponsor is first given a warning, and then a fine. Fines vary between €750 and €4,500 per offence per foreign national, depending on the severity and type of offence.

The IND will impose a fine immediately for serious offences. A serious offence includes, in any case, a violation of the duty of care or the duty to inform that would have led to the withdrawal of the residence permit. Multiple violations of the various duties may be committed per foreign national. The IND will impose a fine for each violation.

In this ruling, the High Administrative Court has now determined that the IND's financial penalty policy is not unreasonable. This should, therefore, be assumed in practice. However, the High Administrative Court also noted that the proportionality of the amount of the imposed fine must always be assessed. There may be circumstances in specific cases under which a full fine is not proportional. Those circumstances must be demonstrated, however.

The IND may decide to issue a warning first. As a recognised sponsor, the employer may object to the issued warning. Why would you do that?

An objection can make a lot of sense; if the warning remains, a fine will immediately be imposed for a repeat of the same offence within 24 months of the issuance of the warning. If the original offence is dismissed through an objection or appeal, a warning can be issued for a subsequent offence, instead of a fine.

In its ruling, the High Administrative Court also makes a distinction between the recognised sponsor's duty of best efforts and duty to achieve a specific result. The High Administrative Court considers the duty of care to be a duty of best efforts. Given the nature of the duty of best efforts, it follows that the recognised sponsor must demonstrate that they have done "their best" to comply with that obligation.

For the employer of highly skilled migrants, for example, this means that the employee's CV and diplomas must have been requested and a job interview held as part of the recruitment process. The highly skilled migrant must also have been informed of his rights and obligations in the Netherlands. If an employer can demonstrate that they have made these "efforts", they have fulfilled their obligation and, as a rule, no fine can be imposed.

The High Administrative Court considers the duty to inform to be a duty to achieve specific results. This means that, if the employer does not communicate a change in a timely manner, it is considered a violation. Such cases rarely involve circumstances in which the imposition of a full fine is not proportionate. There would have to be extremely special situations as a result of which an employer was not able to report to the IND within 28 days.

The IND has stated that the Aliens Act has not been sufficiently enforced for a long time. In my practice, I have noticed that the IND has become stricter. IND inspectors visit companies that are recognised sponsors to check compliance with the obligations under the Aliens Act. During an inspection, the inspectors wish to see the entire administration relating to the highly skilled migrants. The inspectors will request the administration a few weeks before the actual inspection. The IND inspector will check whether the salaries have been paid by banktransfer and in accordance with the highly skilled migrant scheme.

During the IND inspection at the company's office, the employer's authorised representative for the recognised sponsorship will be interviewed. Before the interview, the authorised party will be informed that they are not obliged to reply. The IND inspectors will ask extensive questions about how the employer has set up the recruitment procedure for highly skilled migrants, how the recruitment is carried how, how the administration is set up and whether the person responsible is familiar with the duty of care and how it is implemented within the company process.

According to the IND, companies are selected for inspection indiscriminately. Your company, too, could be selected. Be prepared.