Welcome to the new edition of the Employment Update of Baker McKenzie Amsterdam’s Employment & Compensation Practice.

With this digital newsletter, we will keep you up to date with the current developments in the field of Employment law that may be of interest for your practice.

Since a number of changes will be implemented in the year 2018, we have decided to to remind you of these changes and the possible consequences thereof in this newsletter.

Changes to the minimum Wage and Minimum Holiday Allowance Act

Increase of statutory minimum wage
The gross amounts of the statutory minimum wage have increased as of 1 January 2018. The statutory gross minimum wage applies to all employees aged 23 and older (formerly 22 years and older) and amounts to EUR 1,578.00 per month per month, EUR 364.15 per week and EUR 72.83 per day. The amounts of the statutory minimum wage apply to a full working week.

Contractors entitled to minimum wage
As from 1 January 2018, independent contractors who perform work on the basis of a contract for the provision of services are entitled to the statutory minimum wage. Just like employees who work for an employer on the basis of an employment contract.

Minimum remuneration for overtime and holiday pay
Per 1 January 2018 Article 6 of the Minimum Wage and Minimum Holiday Allowance Act is amended. From this date forward, employers are obliged to pay the minimum wage for overtime. In addition, as from 1 January 2018 overtime must be taken into account for the calculation of the holiday allowance.

Overtime hours can be compensated for in paid leisure if this is stated in the collective agreement and this compensation has been agreed in writing with the employee. In order to allow sufficient time for the trade unions to include this possibility in the collective labor agreement, a written agreement with the employee is sufficient until 31 December 2018.

State pension age increased to 66 and target retirement age increased to 68 years

On 1 January 2018, the state pension age increased to 66 years. The state pension age is the age at which one becomes entitled to an old-age pension. The target retirement age is the age at which one becomes entitled to claims based on the employer's pension scheme.

Increase of the maximum amount of the transition payment

The transitional payment is the statutory payment to which employees are entitled if the employment contract is terminated by their employer after two or more years of service. The maximum of the transition payment is indexed annually.

As of 1 January 2018 the maximum amount of the transition payment has increased from EUR 77,000 to EUR 79,000. Note: if the annual salary of the employee is higher than EUR 79,000 the transition payment is equal to a maximum of one gross annual salary.

General Data Protection Regulation

As of 25 May 2018 the General Data Protection Regulation ('GDPR') will apply, and the Dutch Personal Data Protection Act ('DPDPA') will no longer be in force. The GDPR includes stricter requirements and conditions then the DPDPA. Some of the changes are:

  • The GDPR will apply to all companies processing the personal data of data subjects residing in the European Union. Regardless of the fact whether these companies are data controllers or data processors.
  • The GDPR places several accountability obligations to demonstrate compliance with the GDPR.
  • Under certain conditions there could be a requirement to appoint a Data Protection Officer.
  • Data subjects get more and improved privacy rights.
  • Organizations in breach of GDPR can be fined up to 4% of annual global turnover or €20 Million (whichever is greater).

The 'no-risk' premium for older employees goes to 56

From 1 January 2018 the no-risk premium applies for employees aged 56 years and older. Employers who hire employees from this age group, will be compensated when the employee drops out of work due to illness. This concerns people who have been unemployed for more than one year and have received unemployment benefit. Employers no longer have to be concerned about the extra costs they may incur after employing unemployed people aged 56 years and older who subsequently drop out due to illness. The UWV will take over the payment of the wages of the sick employee aged 56 years and older. The illness of the employees aged 56 years and older also does not lead to a higher premium for the Sickness Benefits Act.

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