Relevant legislative changes in labour law as of 1 January 2020
02 January 2020
Employment & co-determination
As of 1 January 2020, a number of laws and regulations concerning employment have been changed.
In addition to the WAB, the WNRA will finally come into force and minimum wages will rise again. Below, we provide an update on the main employment law changes.
1. The Labour Market Balance Act (‘’WAB’’)
The WAB changes i.a. dismissal law and the transition payment. Previously, we wrote an article about all changes resulting from the WAB. One of these changes also concerns the premium differentiation of unemployment premiums (‘WW’) by nature of the employment contract (in short, the premiums for permanent contracts are lower). In 2020 the low premium is set at 2,94% and the high premium at 7,94%.
2. The Normalisation of Civil Servants’ Legal Status Act ( “WNRA”)
As of 1 January 2020, civil servants will legally become employees. Their official appointment will turn into an employment contract and the administrative legal status regulations are replaced by collective labour agreements. In addition, all regular employment laws and regulations will apply to civil servants. This means, for instance, that dismissal law will apply to civil servants, civil servants may receive summary dismissal, and may have the right to a transition payment or fair compensation. The civil servant may also be bound to a non-competition clause and has the right to the minimum wage. In addition, the rules of employer’s liability will change. The system of administrative objection and appeal will also disappear for civil servants: labour disputes will from now on be settled before the civil court instead of the administrative court.
The WRNA does not apply to all civil servants. Certain groups, such as judges, police officials and soldiers, are excluded and remain civil servants as they were, including special legal protection. On the other hand, new groups of civil servants will be created. These are employees of public authorities such as the UWV, the Dutch Bank and the SVB who used to have an employment contract. With the WNRA, both regular employment law and the new Civil Servant Act will apply to them.
3. The AOW age
The AOW age will not increase in 2020. This means that he AOW age will remain 66 years and four months.
4. Increase of the legal minimum wage
Both the legal minimum wage for adults and the minimum wages for younger employees will increase as of 1 January 2020. The minimum wage for adults aged 21 and over goes from EUR 1.615,80 gross per month to EUR 1.653,60 per month for full time contracts. Employees younger than 21 are entitled to a percentage of the minimum wage since 2019, which percentage depends on their age and situation. This overview of the central government (in Dutch) can be found on: https://www.rijksoverheid.nl/onderwerpen/minimumloon/bedragen-minimumloon/bedragen-minimumloon-2020.
5. WNT fixed remuneration maximum
For 2019, the general remuneration maximum is capped at EUR 201.000,-. Under this general maximum, specific classes of remuneration with reduced maximums are again set for different sectors. These can be found (in Dutch) at: https://www.topinkomens.nl/actueel/nieuws/2019/11/28/sectorale-normen-2020
6. Widening of the working expenses scheme
From 1 January 2020, employers can pay out an amount up to EUR 2.000,- more in untaxed allowances to their employees. This is particularly beneficial for small and medium sized enterprises, because this increase applies to the first EUR 400.000 of the wage bill.