The Netherlands: Summary of legislative changes
A number of changes have been introduced in the area of employment law in NL, with effect from 1 January 2018. We have made a list of the most important legislative amendments and the changes. This is ‘Part I’, for the tracker:
Amendment to the Minimum Wage Act with effect from 1 January 2018
The Minimum Wage and Minimum Holiday Allowance Act (WML) has been amended with effect from 1 January 2018. One of the purposes of this amendment is to prevent unfair competition on the basis of working conditions. We have made a list of the main changes.
Minimum wage for additional work, piecework and remuneration agreements
With effect from 1 January 2018, the minimum wage will also apply to additional work, piecework, and remuneration agreements.
In the case of overtime (additional work), employees must earn on average at least the minimum wage for the total number of hours worked. Suppose an employee has a contract for 40 hours per week but in practice works 60 hours per week. The salary that the employee receives on the basis of 40 hours per week must on average still be equal to the minimum hourly wage if the starting salary were to be divided by 60 hours per week. This amendment will also apply to employees who work on a part-time basis and work additional hours.
As an alternative to paying the minimum wage for overtime hours, the employer can compensate the value of those hours in the form of time off in lieu. This means that an employee will be compensated for overtime hours worked at another time. This compensation is only possible if the employee has agreed to this in writing before 1 July 2018. With effect from 1 January 2019, compensation in the form of time off in lieu will only be possible if the applicable collective agreement provides for this possibility.
Holiday allowance on additional work
With effect from 1 January 2018, earnings from overtime will be part of the WML wage concept. As described above, this means that employees will be entitled to the statutory minimum wage for every hour worked. Employees will not only be entitled to a minimum wage but also to an 8% holiday allowance in respect of the overtime hours.
Piecework pay is the payment of wages for a previously agreed unit of a product. For example, it is possible to agree with a mail deliverer that a certain amount will be paid for each item delivered. With effect from 1 January 2018, employees working on a piecework basis will also be entitled to the minimum wage per hour worked on average. In practice, this means that a record must be kept of how many hours a parcel delivery person spends on delivering parcels. The administration must show that the employee receives on average at least the minimum wage for the number of hours worked on an assignment.
The minimum wage applies not only to employees but also to persons who work on the basis of a remuneration agreement.
Please note: The minimum wage does not apply to self-employed persons, i.e. persons working on the basis of this agreement in the independent practice of their profession or business. However, it does apply, for example, to students who occasionally give extra tuition on the basis of a contract for services.