Below is an overview of the government’s key employment-law plans.
Labour market shortages
To address labour shortages, the government is focusing on reducing demand for labour, increasing labour supply, and improving the match between the two. Employers have been called on to, for example, offer better terms of employment, recruit differently, and look at under-used part-time workers. The government also intends to stimulate innovation and working more hours. It will invest in lifelong learning and improve the connection between initial education and the labour market.
The permanent contract becomes the norm
The government wants to encourage sustainable employment relationships. Permanent employment contracts form the basis for organising structural work. A permanent job benefits both employee and employer: it pays for both sides to invest in each other. Other contract forms will, where necessary, be better regulated so they can no longer be used to compete on terms of employment. The government wants to strengthen the position of flexible workers on fixed-term, on-call and agency contracts (in line with the SER’s advice). Flexible employment relationships should not be used to compete on terms of employment, and people’s income security must be improved. The government is in discussion with social partners on this.
Self-employed workers
The government wants to give genuine self-employed workers room and support, while combating false self-employment. Current tax rules and social security arrangements contain incentives that make working as a self-employed contractor more attractive than an employment contract. The government wants to change this. Greater clarity around the assessment of employment relationships, and measures that make it easier to effectively enforce one’s legal status, should help combat false self-employment.
Stepping up enforcement also plays an important role in compliance with the legal framework.
2023 will see these announced ambitions worked out in detail. Clarifying legislation around the “authority” relationship can help take further steps here. In parallel, the (pilot version of the) web module for assessing employment relationships will be further developed, to support workers and businesses in gaining as much clarity as possible about the legal classification of (intended) employment relationships.
The European Commission has made a specific directive proposal for platform work, aimed at improving working conditions in that sector. This proposal includes a rebuttable legal presumption. The government also wants to pursue a broader legal presumption to combat false self-employment elsewhere too.
Temp agencies and labour migrants
The government is working on a certification scheme for temporary staffing agencies to tackle abuses in the sector. To obtain and retain certification, agencies must demonstrate compliance with the certification standards. Client companies must demonstrate that they work only with certified agencies.
Enforcement will also be strengthened, and the government will improve the information provided to labour migrants. In addition, labour exploitation and serious mistreatment of labour migrants and others will be tackled more effectively through modernisation of criminal law.
Training budget (STAP scheme)
The government is making more training budget available for people with less initial education, who therefore have a more vulnerable position in the labour market. From 2023, the first part of the additional funds will become available for people with, at most, a level-4 vocational diploma.
Mandatory Dutch-language training for labour migrants
The minister will work towards an obligation for employers to offer Dutch-language training to labour migrants. The target implementation date is 1 January 2023.
Minimum wage increase
The government is accelerating and increasing the planned rise in the minimum wage. The minimum wage will rise by 10.15% on 1 January 2023. To make working pay more, the government is also increasing the earned income tax credit, committing a structural EUR 500 million to this.
The government is also embracing the private member’s bill for a statutory minimum hourly wage based on a 36-hour working week. This means every minimum-wage earner will eventually earn the same hourly rate – currently, the hourly rate depends on the length of the full-time working week. Once implemented (expected from 2024), this will result in a higher monthly wage for employees working more than 36 hours per week.
Transition-payment compensation for closing a business due to illness
Small employers can already receive compensation for transition payments paid due to closing their business on death or retirement. The law also allows for compensation where a small business owner must close their business due to illness. The minister has stated that it is not yet clear whether, and if so when, a workable social-medical assessment framework for employer illness can be developed. This will not take effect before 1 January 2024.
Non-compete clauses
The use of the non-compete clause has become so widespread that it can lead to an unjustified restriction on necessary labour mobility. In light of this issue, and the shared need among social partners to reform the non-compete clause, the government intends to work out an amendment to the non-compete clause in more detail and put forward a proposal for change. The aim is to inform the House of Representatives on this in 2023.
State pension (AOW) age
In 2023, the AOW age stands at 66 years and 10 months. Under the Act on Changing the Link to the AOW Age, from 2025 the rise in the AOW age will be linked, for two-thirds, to the rise in remaining life expectancy at age 65. For the years 2025 through 2027, the AOW age is 67.
Capping the 30% ruling
The government wants to cap the 30% ruling (a tax facility for incoming expatriate employees). From 1 January 2024, the 30% ruling will only be tax-exempt up to 30% of the “Balkenende norm” (a reference salary cap). That norm stood at EUR 216,000 for 2022, meaning the maximum tax-free allowance will be EUR 64,800. The proposed cap has no effect on international school fees that may be reimbursed alongside the 30% ruling.
To prevent misuse, it is proposed that the employer choose, per employee per calendar year, whether to apply the 30% ruling or reimburse actual extraterritorial costs. This is set to take effect from 1 January 2023.
Increase in mileage allowance
The proposal is to raise the tax-free mileage allowance from EUR 0.19 to EUR 0.21 per kilometre from 1 January 2023. From 1 January 2024, the tax-free mileage allowance will rise to a maximum of EUR 0.22.
Questions about the above?
Please contact one of Sørensen Advocaten’s employment lawyers. Call: +31 (0)10-2492444
