Netherlands: 2023, Looking ahead
In 2023, Looking ahead, we explore the most important trends and developments related to labour and employment law in the Netherlands.
“Overview (expected) employment law changes in 2023 in the Netherlands”
From January 2023, things will change in the field of employment law. We have listed the most important (expected) changes in 2023 below.
Changes as of January 2023
The gross statutory minimum wage is increased by 10.15%. Also, the general remuneration ceiling of the Standards for Remuneration Act for senior executives in the public and semi-public sector is set at EUR 223.000,- (compared to EUR 216.000,- in 2022). Furthermore, the amount of the transition payment in case of dismissal is capped at EUR 89.000,- as of 1 January 2023. If the annual salary exceeds this maximum, the transition payment will be a maximum of once the annual salary.
The tax-free homeworking allowance is increased from EUR 2 (since 1 January 2022) to EUR 2.15 as of 1 January 2023. With regard to commuting, the tax-free travel allowance is increased from EUR 0.19 per kilometre to EUR 0.21 per kilometre as of 1 January 2023.
- Adjustment tax moment share option rights
As of January 1, 2023, the taxable moment of stock options for employees has been changed in that the employee may determine the taxable moment. Employees will have a right of choice between two taxable moments as of January 1, 2023. They can opt for a taxable moment at the moment i) that the options are exercised (read: converted into shares, these need not yet be transferable) or ii) that the shares become transferable.
- State Pension Age
The state pension age (in Dutch: “AOW-gerechtigde leeftijd”) will be 66 years and 10 months in 2023. In 2022, the statutory pension age was 66 years and 7 months. In 2024 and 2025 the state pension age will be 67 years. From 2026 the statutory pension age will only increase if life expectancy continues to rise.
Changes as of July 2023
- CO2 registration obligation
Entrepreneurs with more than 100 employees will be required to report the CO2 emissions from staff travel as of July 1, 2023. The purpose of this registration requirement is to make employers consciously choose sustainable mobility and thereby emit fewer greenhouse gases in traffic, setting a target of 1 megaton of collective CO2 gains by 2030. If the registration requirement reduces CO2 emissions and if it is likely that the target of 1 megaton of CO2 savings will be achieved by 2030, it will remain a registration requirement only. If this is not the case or if there is no downward trend in CO2 emissions, an emission limit for individual employerswill follow from 2026. If that individual standard is violated, a fine will follow. The amount is not yet set.
The obligation to register relates to business travel and commuting within the Netherlands for which employees receive financial compensation from the employer (such as a travel allowance) or a means of transport is made available to the employee (such as a company car), broken down by fuel type. Entrepreneurs must submit a report once a year via a digital platform of the Netherlands Enterprise Agency (in Dutch: ‘Rijksdienst voor Ondernemend Nederland’). The deadline for the first report is July 1, 2024.
The annual reports will be reviewed by the Ministry of Infrastructure and Water Management (in Dutch: ‘Ministerie van Infrastructuur en Waterstaat’). Based on the data provided, employers will receive a feedback report with an overview of their CO2 emissions. Are there doubts about the reliability or missing reports? If so, employers may be subject to additional checks by the regional environmental service or an administrative sanction in the form of an order subject to a penalty may be imposed.
- Reduced wage payment during illness of old-age pensioners
As from 1 July 2023, the obligation regarding the wage payment during illness of old-age pensioners (“AOW’ers”) will be reduced from 13 weeks to 6 weeks.
- Developments in the self-employed sector; Outline Letter Labor Market
On 5 July 2022, the Minister of Social Affairs and Employment published the Outline Letter Labor Market. This letter outlines an approach to modernize the labor market and announces a review of the legislation, culminating in a clarification of the ‘authority criterion’ in employment relationships. This criterion plays an important role in answering the question whether there is an employment contract or not. A clarification of this may lead to the gray area between employees and the self-employed being reduced. There are also concrete plans to reduce the tax differences between employed persons and self-employed persons without employees. The last word on the self-employed discussion has therefore not yet been said.
- Future Pensions Act
The second pillar in the Dutch pension system will be revised with the Future Pensions Act (in Dutch: ‘Wet Toekomst Pensioenen’). This pillar consists of the work-related pension plans administered by a pension fund or insurance company. Collective system savings will be replaced by individual savings. Each participant pays for his or her own pension, instead of the current collective system. There will be age-independent premiums, where each member will build up a pension in a pension fund through a premium scheme for a personal pension capital. Pension funds will also become more transparent for participants and offer insight into pension accrual options.
The bill has now been passed by the House of Representatives. The Senate will still have to consider the bill. If and when the new rules will take effect is therefore still unclear.
- Amendment Whistleblowers Protection Act
The amendment of the Whistleblowers Protection Act contains multiple measures. However, the basic premise is to give whisteblowers more protection when they report suspected misconduct or a violation of EU-law. The amendment will, among other things, change the rules with regard to the obligation on implementing an internal report procedure. This is now obligated for employers with more than 50 employees. However, with the new amendment the interns and volunteers that are remunerated for their work will also count as “employees”. Therefore the obligation to implement an internal report procedure will be applicable to more employers than before.
The bill has now been passed by the House of Representatives. The Senate will still have to consider the bill. If and when new rules will take effect is therefore still unclear.
- Amendment of the Work and Income (Capacity for Work) Act and the Sickness Benefits Act
This amendment will entail amending the Work and Income (Capacity for Work) Act (in Dutch: “Wet WIA”) and the Sickness Benefits Act (in Dutch: “Ziektewet”), with the aim of making the (medical) advice of the company doctor leading in the context of the Dutch Employee Insurance Agency’s (in Dutch: “UWV”) review of the re-integration efforts for long-term sick employees. The insurance physician of the UWV will – after amending the aforementioned Acts – no longer assess the advice of the company doctor on the ability of the employee to work. As a result, wage sanctions based on a medical difference of opinion between the company doctor and the insurance doctor are no longer possible. For employers this should lead to more certainty about the continued payment of wages in case of illness.
The bill has not yet passed the House of Representatives. Whether and when the new rules will take effect is therefore still unclear.
- Work Where You Want Act
Passed by the House of Representatives on 5 July 2022, the bill on the Work Where You Want Act (in Dutch: “Wet Werken Waar Je Wilt”) aims to give the employee more influence on the location from where the work is performed: at a workplace designated by the employer or at home. This influence is created by restricting the legal possibilities that allow the employer to reject employee’s request to change the place of work to working from home. Such a request to adjust the workplace must be assessed by the employer according to the standards of reasonableness and fairness. The employee’s request may only be rejected by the employer if it follows from a balanced weighing of interests. It is up to the Senate to pass judgment on the bill. At this time, it is unclear if and when the bill will enter into force.