Global Employment Updates 2023: Netherlands

Employment laws of Netherlands 2023

An Overview

There are some significant changes in the Dutch Labour law. While some has already come into force and others will take effect on a later date.

1. THE MINIMUM WAGE

As of 1 January 2023, the minimum wage has increased by 10.15%. The minimum wage paid to workers aged 21 and over has increased from EUR 1,756.20 to EUR 1,934 per month, from EUR 405.40 to EUR 446.40 per week, and from EUR 81.06 to EUR 89.28 per day.

2. TAX-FREE WORK FROM HOME AND TRAVEL ALLOWANCE

The government has proposed to introduce a homework allowance from 1 January 2022. As of 1 January 2023, the tax-free homeworking allowance is increased from EUR 2 (since 1 January 2022) to EUR 2.15. Furthermore, the tax-free travel allowance is increased from EUR 0.19 per kilometre to EUR 0.21 per kilometre. This allowance is expected to be increased further to EUR 0.22 in 2024.

If the employee works part of the day at home and part of the day at office, either the untaxed home office allowance or the travel allowance can be paid. The untaxed home office allowance does not apply to days on which the employee already receives a travel allowance.

3. PAID PARENTAL LEAVE

By August 2022, parents will be entitled to nine (9) weeks of paid parental leave. Parents can take up to 26 weeks leave in total. The paid leave part of 9 weeks should be taken during the first year after the child’s birth. The remaining 17 weeks out of 26 weeks of parental leave remain unchanged and can be taken until child’s 8th birthday. During these nine weeks parents are entitled to benefits of up to 70% of the maximum daily wage. The amount of the benefit shall not exceed 70% of the maximum daily wage. Also, if the employee’s wage is higher than the maximum daily wage, the employer will not be obliged to supplement the allowance.

4. HIGHER RETIREMENT AGE

As of 1 January 2023, the retirement age has risen from 66 years and 7 months to 66 years and 10 months. In 2023, the Dutch government aims for a retirement age of 67 years.

5. ACT ON BALANCED MEN-WOMEN RATIO IN BOARDS.

On 1 January 2022, a new Act on gender diversity in boards of Dutch companies has entered into force. The Act intended to achieve more balanced ratio in the number of men and women on Supervisory Boards and Boards of Directors of limited liability companies under Dutch law. Under the Act, a supervisory Board must consist of at least 1/3rd male members and 1/3rd female members. Further, law requires large companies to set appropriate and ambitious targets to improve the ratio of men to women in their boards.

6. FLEX WORKERS UNDER WORKS COUNCIL ACT

As of 1 January 2022, the regulation on employee participation (i.e., Works Council Act) has been amended, as a result of which flex workers are more involved in employee participation within the enterprise.  The periods for acquiring the right to vote and the right to stand for election are shortened to three (3) months. Furthermore, temporary workers will be regarded as employees working in the company after 15 months and will thus acquire their rights to participate in co-determination after 15 months instead of after 24 months as was previously the case. As a result, temporary agency workers will acquire the right to vote and to stand for election after 18 months (i.e., 15 months plus 3 months).

7. IMPLEMENTATION OF DIRECTIVE ON TRANSPARENT AND PREDICTABLE CONDITIONS

Effective from 2 August 2022, the EU Directive 2019/1152 on the Transparent and Predictable Working Conditions has been implemented in the Dutch law. The Directive gives employees more rights in the context of their employment. The Directive stipulates:

• Mandatory training will be deemed working time, with all costs must be reimbursed by the employer.
• Absolute prohibition on ancillary activities will no longer be valid, unless there is an objective ground that justifies such clause.
• Flex workers are entitled to more predictable working conditions with more certainty.
• Employers are required to provide more information to employees on employment conditions, rights and obligations, including on probationary periods, rights to training and rules on dismissal and related procedures.
• The new legislation also states that if the employer is required (by law, regulation, or collective bargaining agreement) to provide necessary schooling/training/education to the employee, the costs should be borne by the employer and may not be deducted from the employee’s salary.

8. BAN ON SMOKING IN WORKPLACE

As of 1 January 2022, all buildings, government buildings, spaces, and establishments where people work must be completely smoke-free. The Netherlands Food and Consumer Product Safety Authority can impose an administrative fine of EUR 450- EUR 4,500 in case of violation.

9. SOCIAL SECURITY CONTRIBUTION

• The national insurance contribution rates remain the same in 2023. It is 17.90% for general old-age social security (AOW), 0.10% for surviving dependent (spouse) social security (ANW), and 9.65% for long-term care (WLZ).
• The maximum annual salary basis cap for the employer contributions for 2023 is set at EUR 66,956 (2022: EUR 59,706).
• Large employers will have to pay the high contribution of 7.11% for the Invalidity Insurance Fund (Aof) in 2023. Small employers will pay the low contribution, set at 5.82% for the year 2023.
• The low General unemployment insurance (AWF)contribution is 2.64% for contracted workers with an indefinite term and 7.64% for flex workers and temporary workers.
• In 2023, the employer’s levy under the Healthcare Insurance Act (Zvw) will be 6.68% over a contribution base of up to EUR 66,956. In 2023, insured persons who enjoy other income components, such as profit from business, income from other activities, or AOW and pension benefits, must themselves pay an income-related contribution of 5.43% over a contribution base of up to EUR 66,956.

10. LAW ON PROTECTION OF WHISTLE BLOWERS

On 10 December 2022, the House of Representatives passed the bill on the Protection of Whistleblowers Act, which implements the EU Whistleblower Directive. This bill amends the current House for Whistleblowers Act, under which employers with at least 50 employees are required to establish an internal reporting policy for the suspicion of wrongdoing (the so-called whistleblower policy). However, under the new amendment, interns and volunteers who are paid for their work will also be considered “employees”.  The bill has now been passed by the House of Representatives. The Senate will still have to consider the bill.

• PUBLIC HOLIDAYS
• New Year’s Day (01 January)
• Good Friday (07 April)
• Easter Sunday (09 April)
• Easter Monday (10 April)
• King’s Day (27 April)
• Liberation Day (05 May)
• Ascension Day (18 May)
• Whit Sunday (Pentecost) (28 May)
• Whit Monday (29 May)
• Christmas Day (25 December)
• 2^nd Day of Christmas (26 December)

SOME OTHER CHANGES ARE AS FOLLOWS:

• From 1 January 2022, the maximum duration for work permit for foreigners (i.e., employee with a nationality outside European Union) has been extended to 3 years to work in the Netherlands.
• For the year 2023 the tax-free budget under the work-related costs scheme will be increased to 3.00% of the taxable wage bill up to and including EUR 400,000 (proposed earlier: EUR 1.92%; 2022: 1.7%). The rate of 1.18% will remain unchanged for any excess over a taxable wage bill of EUR 400,000.
• As of 1 March 2022, everyone, regardless of their employment status, will be eligible to apply for funding under the brand new STAP budget scheme. Job seekers and employees who are over 18 years old can apply for a budget of EUR 1,000 per year for further education and sustainable development.