Labor Market Balance Act (WAB - Wet arbeidsmarkt in balans) and its amendments - Nalog.nl BV
Home Knowledge base Corporate Banking Labor Market Balance Act ...

For entrepreneurs

Business expenses that an entrepreneur can deduct Features of a tax return for freelancers Instructions: how to order the “Trial calculation” service and what will you get as a result? Fiscal year and tax changes in the Netherlands Hourly criterion and hourly administration of the entrepreneur EMZ (ZZP) Should I register EMZ (ZZP) for small earnings? Registering an EMZ (ZZP) in the Netherlands Account in the payment system for business Rules for the distribution of work and rest in the Netherlands Advance payment (voorlopige aanslag) for entrepreneurs and legal entities Registration of employees from Ukraine is required (form to fill out) Invoice numbering in the Netherlands: common mistakes and options Ecological investment in business in 2022 became even more profitable Consumer law: your rights and obligations as a seller When will an entrepreneur open EMZ: at the beginning of the year or at the end? Bulk verification of BTW numbers by API E-recognition Innovation box Notification of the tax about the bank account of the entrepreneur CV registration Trademark registration Legal opinions Stock deals Corporate Documentation Development and examination of contracts Tax planning Challenging decisions of the tax authority Preparation of reviews and explanatory notes Drawing up letters, certificates, notifications Change in tax liabilities Registration with government and industry organizations Obtaining a VAT number Accounting forecasting Correction and resubmission of declarations Local and industry tax reporting Intellectual property Tax advice Pension benefits in the Netherlands for private entrepreneurs Deduction of costs of doing business

Private individuals

Are you receiving all the benefits you are entitled to? School holidays 2024-2025 Tax relief for working people (Arbeidskorting) How to calculate tax on Box 3 tax return Tax deductions for gifts and charity General tax relief (algemene heffingskorting) Calculate your medical reimbursement threshold Local (municipal) taxes Deduction for medical expenses (aftrek zorgkosten) 2023 Combined Tax Credit for Parents of Children Under 12 (IACK) Do you have to pay tax if you rent out a room in your house? Opgaaf wereldinkomen - Worldwide income statement Weekends and holidays 2024 Minimum wage 2024 How to notify the tax office about your bank account number yourself? My tax return has been in the tax office for a long time, but there is no answer. What to do? Instructions: How to apply for a subsidy at Nalog.nl Holiday rules in the Netherlands Taxation of foreign income in the Netherlands Tax return. Form M Letters with machtigingen from the tax What is jaaropgaaf What is a Zvw contribution? Instructions: How to file a tax return Tax deductions for mortgages and maintenance of your own home How to save on utility bills in the Netherlands (subsidies for improved thermal insulation) About the fare. Receipts and discounts (VIDEO) I want to help: Charity and taxes Box 3 / Box 3 - a book with a description of all webinars Advance calculation (voorlopige aanslag) - an option for those who want to pay taxes or receive tax deductions not at once, but on a monthly basis Fiscal partners Top 9 Tax Return Questions Answered Property transfer tax - basics and innovations from 2021 Health insurance in the Netherlands (part 2) Health insurance in the Netherlands (part 1) "30% ruling" and conditions for its receipt Registration of inheritance and gifts Additional maternity leave What is allowed and what is forbidden to import into the Netherlands Taxes on imported goods How to provide a foreign account number to the tax office Airport Tax Refund (Schiphol) How to get a grace period for filing your tax return The main types of taxes in the Netherlands Dutch taxpayer Where do I go with my problem?

Migration

Income requirements for obtaining a residence permit Recognition of a foreign teaching diploma in the Netherlands Can I work in the Netherlands without a residence permit? What does an O-document look like? How can I extend my stay in the Netherlands without temporary protection? Alien identity card – Vreemdelingen Identiteitsbewijs (VI) What is the difference between a fiscal partner and a migration partner? How and who can get BSN for non-residents (RNI) Residence in the NL for EU citizens (general rules) The procedure for registration of a legal employee who came on a business trip to the Netherlands from an EU country + form A new form of Dutch identity card (Nederlandse identiteitskaart) was launched on 2 August. Legalization of documents for moving to the Netherlands What does a pension in the Netherlands consist of? How is income tax structured in the Netherlands? 4 prerequisites for taxiing Partial tax resident Who is tax resident in the Netherlands? Documents required to apply for a short-term business visa Procedure for obtaining a short-term business visa Extension or change of short-term business visa A reminder to the employer of what he needs to know when sending workers on a business trip How to hire a foreign worker? Part 1 How to hire a foreign worker? Part 2 Standards for salary The procedure for registration of a legal employee who came on a business trip to the Netherlands from an EU country + form Mandatory registration of temporary workers I want to work in the Netherlands! Instructions Memo for an individual entrepreneur who came on a business trip to the Netherlands Permanent residence permit Loss of Dutch citizenship Family reunification European way Minimum income for indefinite permanent residence Minimum income required to apply for a residence permit for medical treatment in the Netherlands Minimum income for a nanny to obtain a residence permit in the Netherlands Income amounts for obtaining a residence permit in the Netherlands for a self-employed and a start-up Minimum income for a researcher to obtain a residence permit in the Netherlands Minimum income for a specialist Minimum Guarantor Income to Request a Visitor Visa Minimum income for interns and trainees Minimum income for cultural workers Minimum income for obtaining a student visa to the Netherlands Minimum Income for Affiliate Family Visa The cost of naturalization in the Netherlands in 2022 In the first year after moving Help (links to useful sites) Short Term Business Visa Everything you need to know about emigrating from the Netherlands "30% ruling" and conditions for its receipt Immigration to the Netherlands Salary standards for obtaining an NL visa in 2020

Labor Market Balance Act (WAB – Wet arbeidsmarkt in balans) and amendments thereto

07.11.2019

The purpose of this law is to make hiring permanent staff more beneficial for employers. It is no secret that many companies are trying to find any reason not to give the employee the permanent contract so desired for the latter. The fact is that it is rather difficult to fire such an employee and employers do their best to avoid risks. All this has led to a certain imbalance in the labor market, which the Dutch government plans to eliminate with the help of WAB. Some changes will be made to the law on dismissal, the payroll system, unemployment insurance premiums and some other provisions governing the relationship between the employee and the employer.

Less than three years after the passage of the Work and Safety Law (WWZ), the Cabinet of Ministers drew up a plan for another law to improve labor market regulation. Or, more precisely, to correct the shortcomings that were in the WWZ, since the studies have shown that it does not work properly.

WWZ's goal was to bridge the gap between employees working under permanent contracts and all those working under other types of contracts. It seems that this has failed: the gap has only widened. That is why the government came up with a new law - the Labor Market Balance Act (WAB).

Pay attention!
Most of the points of the WAB law will come into force on January 1, 2020.

So what is the labor market balance law?

As the name of the law suggests, the government believes that the labor market is not balanced. Studies show that employers, when choosing the type of contract for employees, are guided not by the professionalism of the candidate and the nature of his work, but by the ratio of their own costs and risks. First of all, this affected employees applying for a permanent contract, but those who work part-time, as a private entrepreneur or through uitzendbureau, also felt it. This means that more and more workers, especially young people, have to settle for temporary contracts.

To improve the current situation, the government has proposed a number of measures, which, in fact, are set out in the WAB. The new rules should create such conditions under which it will be more profitable for the employer to hire employees on a permanent contract.

The government wants to achieve this by making the permanent contract itself (contract voor onbepaalde tijd) easier for employers. On the other hand, working on other types of contracts will become less flexible and therefore less attractive.

What does the Labor Market Balance Act contain?

The WAB contains a number of measures that can be divided into several components: the law on dismissal, the provision on employment under temporary contracts and unemployment benefits.

Briefly about these changes:

  1. Dismissal Act

A number of measures are provided here that will allow an employer to more easily part with employees who have a permanent contract.

  • Introduction of a new ground for dismissal

The conditions for the layoff of permanent employees will become less stringent. Now, in order to dismiss an employee from a permanent contract, one of the eight grounds for dismissal must be fully met. Under the new labor market balance law, dismissal will also become possible in the presence of a combination of circumstances related to different grounds, the so-called cumulative basis.

To make it clearer what we are talking about, consider an example. Let's say the employer decides to fire his employee for the fact that he fulfills his duties in bad faith, however, he cannot provide a sufficient amount of supporting materials. At the same time, the manager's relationship with the employee is also seriously damaged. Considered separately these two grounds for dismissal, they may not be enough, but if considered together, it may become a reason for termination of the contract.

  • New method of calculating severance pay (benefits that are paid upon termination of employment)

Now, upon dismissal of an employee, the employer is not obliged to pay him an allowance if he has worked for less than two years. This will be changed in the new law. Under the WAB, an employee is entitled to severance pay if he is dismissed from the first day of work, even if he was fired during the probationary period.

On the other hand, this severance pay will decrease. For each year worked, an employee will be able to receive 1/3 of the monthly gross salary (also for years after ten years of work in the organization). Whereas according to the rules that are in force now, after ten years of work, the employer must pay another 1/2 of the monthly gross salary for each year worked.

 

In addition, the period for which the employer has to pay the severance pay will no longer be rounded to half a year, but will be calculated based on the actual duration of the contract.

Pay attention!
Small businesses that employ employees will receive severance pay under WAB, which they must pay when the business closes due to illness or retirement.
  1. Working on other types of contracts will become less attractive

The government wants to make work on other types of contracts less flexible and therefore less attractive. To this end, the following measures have been included in the WAB:

  • Increase in the term in which a fixed-term contract can be offered

The employer now has the right to offer the employee three consecutive fixed-term contracts for a maximum of two years. From the next (2020) year, this period will be increased to three years.

The mandatory break between two consecutive fixed-term contracts remains six months. However, an industry-specific mandatory collective bargaining agreement may stipulate that this period will be reduced to three months. This is only possible if we are talking about seasonal work, which can be performed no more than nine months a year.

  • New rules for workers with minimum employment

The new law provides that the employer will have to notify the employee who works on call (that is, has a zero contract or a contract with minimum employment) at least 4 days before the time he needs to go to work, as well as pay wages. if the job was canceled in less than 4 days.

Also, after a 12-month period of work on call, the employer is obliged to offer such an employee a contract for the average number of hours worked by an employee this year. For example, if an on-call employee was hired for 20 hours a week, but worked an average of 28 hours a year, then they should be offered a 28-hour contract. If the employer does not, the employee is still entitled to pay based on this number of hours.

  • The new position of employees working through payroll organizations

So far, lighter rules apply to employees working through payroll organizations, the same as for employees working through uitzendbureau. Within the framework of the WAB, such employees will receive almost the same status as ordinary employees of the company. This means that such employees will be more expensive for employers because of the services of the payroll organization and the employment office, which will make this form of contract less interesting.

Equality between employees working through payroll organizations and companies' own employees will affect both primary and secondary working conditions (and this is not only salary and vacation pay, but also bonuses, thirteenth salaries, holidays, and so on). Only the rules regarding the retirement of such an employee will remain the same.

  1. New classification of unemployment insurance premiums

For each employee with whom a permanent contract is concluded, the employer will receive a bonus from the government in the future. This means that employers will pay lower unemployment insurance premiums for permanent employees than for employees with temporary or flexible contracts. Moreover, this contribution continues to depend on the sector to which the company belongs.

logo nalog

Several of our topics



You can find more topics on our home page or on the menu.

logo nalog

What do you think of this site? *

The purpose of your appeal?

Do not enter any personal information such as name, social security number, or phone number. We do not respond to questions, comments and complaints that come through this form.

cancellation