20 Sep Budget Day 2023 – the highlights for employers
On Budget Day – the third Tuesday in September – the King delivers the ”Troonrede”. Due to the demissionary status of the government, the SZW ”Miljoenennota” and Budget contain a limited number of new measures compared to the Spring Memorandum. In this article, we highlight the most important employment law changes.
The basis of the new developments is that work must be secure and rewarding. Low- and middle-income workers will pay less tax: the employment tax credit goes up. Other employment market reforms should ensure that workers get permanent contracts sooner and know where they stand. Zero hours contracts will be abolished and replaced by a basic contract with more schedule and income security. The most uncertain phases within temporary work will be shortened from a maximum of 5.5 years to a maximum of 3 years.
Continued sick pay and replacement of sick employees
Efforts are underway to amend the rules on sick pay. The rules will become clearer so that small and medium-sized employers will have earlier clarity on the possibility of replacing a long-term disabled employee.
Still no compensation for SME transitional allowance in case of termination due to employer’s illness
Small employers who terminate their business activities due to retirement or death are entitled to compensation for transition pay under certain conditions. It was decided that the section in case of business termination due to illness of the SME employer will not take effect. This decision was made after extensive research, which showed that it was not feasible to develop a socio-medical framework to assess the employer’s illness.
WW premium and overtime
Currently, employers pay the higher rate if an employee works more than 30% beyond what was agreed to in the contract. There is an exception for employees with contracts of more than 35 hours per week. This limit is reduced to 30 hours per week. As a result, employers are less likely to face higher unemployment insurance premiums retrospectively if overtime over the entire year averaged more than 30% of contract hours.
Simplification of leave system
The leave system is also being overhauled; it needs to be simpler and clearer. Among other things, the government wants to equalize the take-up periods of (additional) birth leave, paid parental leave, and adoption and foster care leave as much as possible, up to 12 months after the birth of the child or admission of the child into the family. Maternity leave remains unchanged to ensure maternal health and safety. It also continues to be possible to take adoption and foster care leave four weeks before admission to the family. Opportunities for simplification will be identified in 2023. This will be further developed in 2024, including the SER opinion on leave, which will be published in the fall of 2023.
Addressing false self-employment
Tackling false self-employment remains as topical as ever. The Law establishing disability insurance for the self-employed is scheduled to take effect in the first quarter of 2025. In the context of tackling false self-employment, the Law amending the definition of the concept of employment relationship is also scheduled for that period.
Minimum wage by 2024
With the introduction of the new minimum hourly wage rules, one minimum hourly wage will now apply in all sectors and the fixed daily, weekly and monthly amounts will disappear.
Consideration of bills
Consideration of the legislative proposals of the Ministry of Social Affairs and Employment can largely continue, including the Initiative Bill on Equal Pay for Women and Men, Initiative Bill on Amendment of the Working Conditions Act in connection with entering into a discussion between the employer and employees on inaccessibility outside working hours (formerly: Right to Inaccessibility Act), Bill on Greater Security for Flex Workers and Bill on Reform of the Competition Clause.
Wondering what the latest developments mean for you?
Then contact one of the employment lawyers at Sørensen Lawyers without obligation. Call: 010-2492444
