The Netherlands: Summary of Recent Labour and Employment Law Developments
In the past month, there have been several labour and employment law developments, chief among them:
I. Introduction of Emergency Fund Bridging Employment (EFBE)
Due to the Coronavirus (COVID-19), the government has introduced, as a temporary measure, the Emergency Fund Bridging Employment (EFBE). Consultations are currently being held on the implementation of this scheme.
In short, this new scheme boils down to employers being paid a max. of 90% of the wages. The amount of the contribution towards wage costs depends on the drop in turnover. Furthermore, the following conditions apply to the granting of the compensation:
- During the period in which wage costs are compensated, the employer must not apply for dismissal for his employees for commercial reasons. A dismissal on other grounds, such as dysfunction or a disturbed employment relationship, are still possible.
- The applicant expects at least a 20% loss of turnover.
- The application applies for a period of 3 months, which can be extended once by another 3 months (further conditions may be imposed on the extension).
The scheme has a retroactive effect and envisages decreases in turnover from 1 March 2020. For more information, click here.
- Fundamental changes in employment law with effect from 1 January 2020 (Part II)
II. Record Employment Contract in Writing Before 1 April 2020!
As mentioned in the previous tracker, sectoral unemployment insurance contributions have been abolished and replaced by a new system. From 1 January 2020, employers pay a higher unemployment insurance contribution for fixed-term employment contracts and a lower contribution for permanent contracts. Employers must state on the payslip whether the employee has a permanent or fixed-term contract and whether there is an on-call contract. Where a contract has been tacitly converted to a permanent contract, this must be laid down in writing.
Has a fixed-term employment contract been converted into an indefinite contract without a new contract having been drawn up for this? For example because this was agreed by telephone? In that case, an appendix (addendum) to the original employment contract, signed by both parties, is sufficient to pay the low unemployment insurance premium.
Employers will have until 1 April 2020 to comply with the so-called written requirement for the low unemployment insurance premium. This means that until then employers are allowed to pay the low unemployment insurance premium. Even if the employment contract for an indefinite period (but no on-call contract) has not yet been laid down in writing, or if the employment contract or the addendum has not yet been signed by both parties.
- Other changes as of 1 January 2020
As set out in previous Employment Law Trackers, the new year saw the entry into force of the Balanced Labour Market Act. In addition, there are some other changes in employment law with effect from 1 January 2020:
III. Entry into force of Public Servants (Standardisation of Legal Status) Act
The Public Servants (Standardisation of Legal Status) Act (Wet normalisering rechtspositie ambtenaren, “WNRA”) entered into force on 1 January 2020. It provides that the legal position of public servants will mirror that of employees, as much as possible. For more information, visit the website of the Ministry of the Interior.
IV. Expansion of Work-Related Expenses Scheme
The work-related expenses scheme allows employers to give their employees allowances, without being subject to payroll tax on the amounts awarded. The scheme has been expanded with effect from 1 January 2020. The percentage of the wage bill for tax-free payments has been increased from 1.2% to 1.7%. The increase applies to the first €400,000 of the wage bill. Above this figure, the percentage of 1.2% continues to apply. Click here for more information on the work-related expenses scheme.
V. Top Income Earners
The Senior Executives in the Public and Semi-Public Sector (Standards for Remuneration) Act (Wet normering topinkomens, “WNT”) limits the annual income of senior executives in the public and semi-public sectors, with effect from 1 January 2020, to €201,000. In 2019, the general maximum gross remuneration was €194,000. Click here for an overview of the sectoral limits.
VI. State Pension Age
The State Pension Age will remain 66 years and 4 months in 2020 and 2021. Click here for an overview of the State Pension Age per year.
VII. 2020 Minimum Wage Amounts
From 1 January 2020, the statutory gross minimum wage is €1,653.60 per month, based on full-time employment. Click here for a comprehensive list of the amounts (weekly, hourly and minimum youth wage).
Palthe Oberman attorneys are available to assist you with these and other workplace issues. For more information, visit paltheoberman.nl.
For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.
