Advanced labour markets are typically stratified by country of birth, with natives occupying more desirable (high-skilled) positions and immigrants occupying less desirable (low-skilled) positions. Immigrants also run a higher risk than natives to be over-educated in their job. There are many possible reasons for this situation but the aim of this paper is to investigate whether employer recruitment choices reinforce, counteract or are neutral for these patterns. We use experimental correspondence audit data derived from 7,111 job applications sent to job openings, where the ‘foreignness’ of the job applicants have been randomly assigned to otherwise equally merited job applications, and employer callbacks to these job applications have been recorded. We find that negative discrimination of job applicants with foreign names is prevalent everywhere, but it is markedly higher in skilled occupations. Furthermore, a content analysis of job advertisements reveals that a job applicant with a foreign name has a lower chance of getting an employer callback if the job advertisement contain words related to competence, within occupations. We add to previous research by providing clear evidence that not only do employers contribute to ethnic stratification by limiting immigrants’ access to the labor market, but also by channeling immigrants to low-skilled jobs, contributing to a ‘subordinate inclusion’ of immigrants in the host society.