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If you fail to pay the proper minimum wage or holiday allowance rate, or if you provide your employees with payslips that contain incorrect data, your employee may apply to a court of law. They also may lodge a complaint with the Social Affairs and Employment Inspectorate (SZW Inspectorate). Employees are entitled to claim any arrears up to 5 years.
SZW Inspectorate competences
The SZW Inspectorate may decide to:
- check if you pay the proper minimum wage and holiday allowance rate
- check your accounts when suspecting underpayment
Consequences of underpayment
When failing to comply with the Minimum wage and holiday allowance Act (WML), the SZW Inspectorate may decide to impose fines and other sanctions, such as fines for:
- not being able to prove the sum total of paid wages and holiday allowances as well as the total number of hours worked or failing to provide your employee with a correct payslip. The fine may amount to €12.000.
- not paying the proper minimum wage rate. The fine may amount to €10.000 per underpaid employee.
- paying the minimum wage in cash, which may result in a fine of up to €1.250.
- not paying the proper holiday allowance. A maximum fine of €2.000 may be imposed.
- impose a non-compliance penalty if you fail to pay what you owe within 4 weeks after the payment became due, with a maximum fine of €400 per day per employee and a maximum of €40.000 in total per employee.
If an employer violates the minimum wage rules 2 or 3 times within a 5 year period, the fine will be 2 or 3 times higher as well. You may also have to suspend (part of) your activities for a maximum of 3 months. Please note: depending on the seriousness of the offence, a 10 year period may apply.