News Update Employment & Pensions

A number of changes to employement law will also come into force in 2024 We highlight some of these and discuss some other expected legislative changes.

From 1 January 2024

Introduction of minimum hourly wage

The same minimum hourly wage will be introduced for all employees. Replacing the minimum daily, weekly and monthly wages with a minimum hourly wage will end the situation where employees working 40 hours a week receive a lower hourly wage than employees working at companies where a 36-hour working week is the full-time standard.

Increase in tax-free travel allowance

The tax-free travel allowance will rise from EUR 0.21 per kilometre to EUR 0.23 per kilometre.

Maximum transition payment

The transition payment will be adjusted from EUR 89,000 to EUR 94,000. If the annual salary is more than EUR 94,000, the transition payment will be capped at one gross annual salary.

Pension accrual

Employees will start accruing pension from age 18 instead of age 21.

From 1 July 2024 

Registration of carbon emissions

From 1 July 2024, employers with 100 employees or more will be required to keep records of their employees' carbon emissions and report this data to the government every year on 30 June at the latest. The carbon emissions of all business travel and commuting must be reported. Air travel and journeys made with vessels, such as a ferry, fall outside the scope of the reporting obligation.

In this context, 'employees' means persons with an employment agreement for at least 20 hours a month, and also includes employees living abroad but working at a company's Dutch branch. No data needs to be reported on agency workers, seconded employees or self-employed persons.

If a company has several branches that all have the same Chamber of Commerce number, the aggregate data of these branches must be reported. 

The Netherlands Enterprise Agency's website includes a digital form that companies can use to submit their report. Employers will usually already have the data to be reported on file, such as the total number of kilometres travelled by employees for business and commuting purposes in any calendar year. In addition, they must report the annual total kilometres broken down by means of transport and type of fuel used.

Other legislative amendments on the horizon

Bill requiring companies with ten employees or more to appoint a confidential adviser

In 2023, the Dutch House of Representatives adopted a bill requiring employers to appoint a confidential adviser. Its purpose is to reduce undesirable behaviour in the workplace and create a safe working environment for all employees.

Further, the bill lays down rules on a number of basic duties of confidential advisers and strengthens confidential advisers' legal position at organisations.

Small companies with fewer than ten staff will be exempt from this obligation for now.

The bill is currently being debated by the Dutch Senate.

Non-compete clause reform

The government is seeking to tighten and reform the legislation on non-compete clauses to facilitate employee mobility.

The changes are set to include statutory geographical and time restrictions for non-compete clauses. Also, the obligation for employers to explain what substantial business interests are served by the non-compete clause is to be extended to employment agreements for an indefinite term. Further, employers will have to pay compensation to employees leaving the organisation if the employer invokes the non-compete clause against them.

These plans are currently being worked out into a bill, which will be submitted for consultation before being sent to the Dutch House of Representatives The date on which it may enter into force has not yet been announced.

Countering of pseudo self-employment

The Assessment of Employment Relationships and Legal Presumption (Clarification) Act (Wet verduidelijking beoordeling arbeidsrelaties en rechtsvermoeden) aims to define more clearly when a worker qualifies as self-employed and when they are considered an employee.

• The standard of 'working in the service of' (authority) from Article 7:610 of the Dutch Civil Code will be clarified and the key elements indicating the existence of an employment agreement (directions on job content and organisational embedding) will have to be continually weighed against contraindications suggesting otherwise (entrepreneurship).
• A rate below EUR 32.24 (reference date: 1 July 2023) gives rise to the legal presumption of an employment agreement.
  
  

The bill is expected to be presented to the Dutch House of Representatives in the second quarter of 2024. The proposed effective date of the measures in this bill is 1 July 2025.

Draft bill amending the rehabilitation obligations in the second year of sickness for small and medium-sized employers

Small and medium-sized employers will get the option to jointly decide, from the start of the second year of sickness, to end the first-track rehabilitation process.

Doing so will release the employer from the obligation to keep the employee's own position available (even if the employee makes a full recovery) or to allow the employee to return to work in a position within its organisation. 

However, the obligation to continue to pay wages, the rehabilitation obligation and the prohibition of termination will continue to apply. 

In the second year of sickness, rehabilitation of the sick employee will focus entirely on the second track, meaning a return to work at a different employer. If the employee makes a full recovery in the second year of sickness and their 'own' role is still available, the employee will be entitled to return to their own position. A new ground for dismissal will be created for situations where the employee's own position is no longer available after the end of the first track (the 'j ground').

This way, both the employer and the employee will have clarity at an earlier stage on which rehabilitation track to follow and the employer will know sooner whether the sick employee can be replaced.

Where the employer and the employee have not reached agreement but the employer nevertheless wants to end the first track, approval can be requested from the Dutch employee insurance agency (UWV).

The consultation period for this draft bill has now ended and the final bill is scheduled for 2024.

Finally

How and whether the announced legislative changes will be worked out will depend on the formation of the cabinet and how the new House of Representatives deals with them. We will keep you updated.