The increasing number of illegal workers from countries outside the EU has prompted the Dutch government to consider custodial sentences instead of fines for jobs agencies and employers.

Altthough work is underway on a licencing system for agencies, that is not expected to come into effect until next year.

Until then, jobs agencies that operate outside the rules continue to recruit and exploit workers and are increasing their scope to countries outside the EU, the labour inspectorate told broadcaster NOS.

In a recent raid on a greenhouse in the Westland the inspectorate found 20 illegal workers from Georgia. The agency and the employer will be hit with a fine of hundreds of thousands of euros.

“What we are seeing is that there are not enough European workers to go around. Then all sorts of ways are being explored to get people from outside the EU,” chief inspector Marijke Kaptein told broadcaster NOS.

There are currently between 600,000 and 800,000 foreign workers doing low skilled jobs in the Netherlands, a number that grows by between 40,000 and 50,000 each year. Exploitation is rife, with workers housed in inadequate accommodation and threatened with instant dismissal if ill.

Kaptein said political choices must be made about which parts of the economy can still grow and which parts should be maintained or shrunk. “We are a low-wage country with a huge concentration of activity in a small area. That is not sustainable. The current growth of labour migrants is detrimental to housing, education and healthcare,” Kaptein said.

Social affairs minister Eddy van Hijum said the Netherlands had become too dependent on cheap labour. “Too many sectors have become addicted to labour migrants to solve their problems,” he told the broadcaster.

The minister said that more controls and stricter penalties would help. Later this month the cabinet will discuss legal measures making it easier to prosecute employers and agencies, with possible penalties including prison time.