Employers and entrepreneurs keep the country running and are crucial to its prosperity. Thanks partly to everyone’s flexibility and the government support packages, unemployment is low. At the same time, the new cabinet sees that the gap in the labour market has widened, and the Netherlands Institute for Social Research reports that 28% of the Dutch population is (financially) vulnerable. In addition, the nature of our work is changing due to digitalisation, automation and globalisation. This makes the future unpredictable, but also offers opportunities.
The new coalition wants to implement a number of major labour-market reforms that strengthen the security of existence for low and middle incomes, reduce burdens so that work pays, keep employership and entrepreneurship attractive, improve our wellbeing, and address staff shortages in vital sectors.
The final report of the Borstlap Committee and the chapter “Labour market, income distribution and equal opportunities” from the SER’s medium-term advice form the guiding framework for how the labour market of the future will be shaped.
The new coalition’s labour-market plans are as follows:
- We are investing a total of EUR 500 million per year in reforming the labour market, reintegration, and tackling poverty and debt. We are also committing EUR 300 million per year to reduce the burden on SMEs through wage continuation during illness.
- We are narrowing the gap between permanent and flexible work. Too many people in the Netherlands depend on temporary contracts, creating insecurity. In line with the SER’s medium-term advice, on-call, agency and fixed-term contracts will be better regulated. To increase businesses’ internal flexibility and agility, a budget-neutral part-time unemployment benefit scheme will be developed in consultation with social partners, with an eye to feasibility and affordability.
- We are making work pay more and reducing the poverty trap. We are introducing a minimum hourly wage based on a 36-hour working week. We are raising the minimum wage in steps by 7.5%, and keeping benefits linked to it (except the state pension) to strengthen the minimum standard of living. We are supporting older people through a higher tax credit for pensioners.
- Clarity for the self-employed. Genuine self-employed workers will be supported, and entrepreneurship encouraged. Further development of a web-based assessment tool can help self-employed contractors gain advance certainty about the nature of their working relationship. False self-employment will be tackled through better public-law enforcement where an employment relationship is suspected. A disability insurance scheme will be introduced for all self-employed workers, designed to prevent unfair competition and excessive income risk for individuals, taking into account the conditions of the pension agreement. The self-employed deduction will be reduced from 2023 in steps of EUR 650, down to EUR 1,200 by 2030. Self-employed workers will be compensated during this cabinet term through an increase in the earned income tax credit.
- Despite the significant tightness in the labour market, too many people still cannot find work and remain unnecessarily on the sidelines. In the coming years, we therefore want to work with social partners, municipalities and the UWV to guide more people into work. We will also guide more people at a distance from the labour market into work, and expand the number of sheltered workplaces.
- We are expanding labour-market infrastructure to encourage the transition from job to job and from benefits to work. This includes tools for retraining and upskilling that support moves into sectors with shortages. Experience gained with regional mobility teams during the coronavirus crisis will be drawn on here.
- We are also promoting continuous learning through individual learning rights. In consultation with social partners, the termination of employment via a job-to-job route from the medium-term advice will be worked out in more detail. We are taking measures to improve the labour participation and position of people with reduced work capacity. We are also examining, in consultation with social partners, how “hard edges” in the Work and Income (Capacity for Work) Act (WIA) can be reformed, with an eye to feasibility, affordability and explicability.
- In cases of illness, the primary focus is on the employee’s recovery and return to work. To improve wage continuation during illness, reintegration in the second year will, in line with SER advice, in principle focus on the “second track”, limiting inflow into the WIA as much as possible.
- We are making it more attractive for parents to combine work and care by increasing childcare reimbursement for working parents in steps to 95%. We are also working on gender equality in the labour market by extending paid parental leave to 70%, tackling pregnancy discrimination, and better monitoring pay gaps. We are encouraging labour participation, more hours or days of work per week, and proportional representation of women in leadership positions.
- We are implementing the pension agreement for a good and decent pension for all generations.
For the coalition agreement “Looking out for each other, looking ahead to the future”, click here (in Dutch).
Questions about the above?
Please contact one of Sørensen Advocaten’s employment lawyers. Call: +31 (0)10-2492444
