Parliamentary letter on progress on the so-called Dutch labour market package

12 April 2023

On Monday 3 April 2023, the long-awaited progress letter from the Dutch Minister of Social Affairs and Employment was published. In this letter, the minister announced a number of legislative changes. With these legislative amendments, the minister aims to level the playing field between employees and the self-employed and to reduce differences in treatment between employees with a permanent (long-term) employment contract and employees with a flexible contract. This legislation is scheduled to be debated in spring 2023 and to enter into force no later than 1 January 2025. Below is a short overview of the most important legislative changes announced.

1.  Mandatory disability insurance for self-employed workers

There will be compulsory disability insurance for self-employed workers. There is a one-year waiting period. The circle of insured persons will be Entrepreneurs subject to income tax rules (Director and Major Shareholder not (yet). There will be an opt-out in case of an equivalent insurance.

2. On-call contract to be abolished

The on-call contract, such as zero-hours and the current min/max contracts will be abolished. Instead, there will be a so-called basic contract. Within a basic contract, employees will have certainty about the minimum number of hours they will be deployed, not being zero hours (bandwidth). The maximum bandwidth availability will be 130% of working hours. Pupils and students will still be able to continue to work under the current on-call contracts.

3. More security for temporary workers

Temporary workers will get a more secure contract with the agency through which they work, more quickly. Phases A and B (see already the current Collective bargaining agreement for employment agency workers) will be shortened: 52 weeks phase A and 2.5 years phase B. In addition, temporary workers will receive – not the same but – equivalent working conditions. Finally, temporary employment agencies must meet certification requirements by 1 January 2025.

4. The Dutch ‘ketenregeling’ will be adjusted

The current provisions on succession of fixed-term employment contracts, the so-called ‘ketenregeling’ will be adjusted. The interruption period applicable to chains of temporary employment contracts, namely 6 months, will abolish. It will be replaced by an administrative expiry period of 5 years. Students and pupils will be exempted from this. Furthermore, the government removes the current possibility to deviate from the duration and number of employment contracts by collective bargaining agreement. The same applies to the possibility to deviate from the duration of the provisions on succession by collective bargaining agreement.

5. Modification of reintegration obligations for smaller employers

A smaller employer (up to 100 employees) and its employee can jointly decide to close the first track reintegration after the first 52 weeks of incapacity for work. If the employer and the employee do not reach an agreement on concluding the first track, and the employer still wants to conclude the first track, the UWV must be asked for permission. If the first track is concluded, the starting point is that the employer can terminate the employment contract after two years, subject to conditions. It is then clear to the employer that he no longer needs to keep a working place available for the employee, and the employer has clarity that he can permanently replace the sick employee.

6. Premium differentiation WW: no premium increase for additional work from 30 hours per week fixed contract

The increased premium of 5% points when 30% is exceeded, does not apply in case the employee has a permanent contract for at least 30 hours per week (is currently 35 hours).

7. Contingency staff retention scheme

There will be a Calamity Personnel Retention scheme, formerly Partial Unemployment-benefit. The scheme will aim to deal with crisis and calamities that fall outside the regular entrepreneurial risk. At legislative level, it will include which circumstances will not qualify as crisis or calamity within the meaning of this scheme. Employers can choose two options under this scheme: 1) Have employees temporarily perform other work; or 2) Have employees work at least 20% less. 80% pay is paid on the number of hours not worked, with total pay not to fall by more than 10%. Nor should the employee’s income fall below the legal minimum wage. If the employer chooses option 2, he could apply for a 60% allowance for the wage costs of the hours not worked by the employee.

Author: Ilaha Muhseni