As of January 1, 2020 the Balanced Labour Law (“WAB”) act will come into force
The changes to the current Dutch Labour and Employment Laws will affect several types of employment contracts. The main goal is to make it more attractive for employers to hire employees on a permanent basis by reducing the gap between permanent contracts and flexible employment. The WAB contains a number of important legislative changes in relation to flexible employment, dismissal law, the transition allowance, pay rolling and on-call contracts. All Dutch employers are affected by the above changes and should therefore take action to become compliant.
A few highlights:
- The payslip should moving forward include specifics about the agreement (a.o. definite / indefinite period);
- The duration of Successive Fixed-term Employment Contracts will be extended from 24 to 36 months;
- The new legislation amendment will allow an employer to combine different grounds for dismissal;
- The new law provides employees a transition payment from the first day of their employment. The calculation of the transition allowance will be adjusted. Instead of one-sixth monthly salary per half year, an employee will receive a third of the monthly salary per calendar year. The higher accrual for employment contracts longer than ten years will be abolished;
The law provides that employers will pay a lower unemployment insurance contribution (WW-premium) for an employee with a permanent employment contract than for an employee with a fixed-term employment contract. The change in the unemployment premium differentiation must contribute to making the permanent contract more attractive compared to the flexible contract.