
14 Dec Main legislative changes in HR in 2024
LEGISLATIVE CHANGES
1. Whistleblowers Protection Act
- In our February 2023 newsletter, we already wrote about the Whistleblowers Protection Act, which entered into force on 18 February 2023. For public employers, large private employers (more than 249 employees) and employers providing certain services (such as financial services), this Act came into force immediately. For private employers with 50 to 249 employees, the Act will oblige them to comply with the Act in a few days, namely from 17 December 2023.
- The Whistleblowers Protection Act results in many changes. For instance, stricter requirements are imposed on the internal reporting procedure, the definition of ‘wrongdoing’ has been broadened, from now one more persons will be classified as a ‘reporter’, the prohibition of disadvantageous treatment has been broadened, and the burden of proof has been reversed.
- In short: employers that have not yet done so, should promptly adapt their internal reporting procedure in which – since a determination, amendment or withdrawal of a reporting procedure is subject to consent under the Works Councils Act – the works council or employee representative body must be involved in a timely manner.
2. Change in minimum (hourly) wage
- As from 1 January 2024, the minimum wage will no longer be set as a monthly amount, but rather as a minimum hourly wage. That statutory minimum hourly wage will be €13.27 gross per hour for employees aged 21 and older. A complete overview of the applicable minimum hourly wages as from 1 January 2024 can be found here.
- The question is how this relates to salary scales and hourly rates established in current collective bargaining agreements that fall below the minimum hourly wage. In a knowledge document about this, the Ministry of Social Affairs and Employment reported that in many cases salary scales in collective agreements will have to be adjusted because of the introduction of the statutory minimum hourly wage on 1 January 2024. If you have any questions about this, please contact us.
3. Capping and scaling back of the 30% rule
- As from 1 January 2024, a capping of the 30% rule will apply equal to the ‘Balkenende-standard’ (also known as the ‘WNT-norm’). This means that (subject to transitional law) the 30% rule can be applied only to wages up to € 233,000. Therefore, if an employee earns more than € 233,000, the 30% rule can no longer be applied to wages above that standard. In other words, wages exceeding this standard must then be taxed in accordance with the regular tax rates. This capping applies immediately for employees who use the 30% rule from 1 January 2023. For employees who were already using the 30% rule in December 2022, transitional rules apply.
- At the end of October 2023, the Lower House furthermore adopted two amendments in the context of the Tax Plan 2024 to further cut back on the 30% rule. The aim is for these amendments to be adopted by the Upper House before 1 January 2024 and consequently to become law as of 1 January 2024. Both amendments are explained below:
- The first amendment envisages that a maximum duration of 60 months will apply to the 30% rule, with the tax rates also gradually scaling down. This will look as follows:
- a maximum of 30% for the first 20 months;
- a maximum of 20% for the following 20 months; and
- a maximum of 10% for the following 20 months.
- The first amendment envisages that a maximum duration of 60 months will apply to the 30% rule, with the tax rates also gradually scaling down. This will look as follows:
The above will not apply to employees who were granted the 30% rule before 1 January 2024. Transitional law will apply to these employees, allowing them, subject to certain conditions, to continue to be eligible for the 30% rule without any scaling-down (i.e. without applying a maximum of 20% and 10% as from 20 months).
- The second amendment concerns the abolition of the foreign partial tax liability by 2025. Currently, employees covered by the 30% rule can opt for partial non-resident taxpayer status in their income tax returns. When a resident taxpayer uses this status, it means that the taxpayer is treated as a non-resident taxpayer for income generated in Box 2 and Box 3. In this way, they will then not be taxed on Box 2 and Box 3 income in the Netherlands. If this amendment is adopted by the Senate, the aforementioned status can no longer be used and d this group of employees will have to pay tax on income generated in Box 2 and Box 3. Here too, however, transition law applies. Employees who used the 30% rule before 1 January 2024, can still make use of the status until 2026 or as much earlies as the 30%-ruling ends.
4. Reporting on C02 emissions mobility from 100 employees upwards
- From 1 July 2024 – which was previously to be 1 January 2024 – a CO2 reporting obligation will apply to employers with more than 100 employees. In short, this CO2 reporting obligation means that employers must keep records of the total business kilometres travelled by employees as well as commuting kilometres. Note: this obligation applies only to employers who offer mobility facilities to their employees (such as a bicycle, car, public transport ticket or financial compensation for commuting or business mobility). If an employer does not offer its employees any mobility facility, the CO2 reporting obligation does not apply.
- Each year, employers must submit the previous year’s report to the Rijksdienst voor Ondernemend Nederland (Netherlands Enterprise Agency) by 1 July, after which that agency calculates the CO2 emissions. Consequently, the first report must be submitted to the Netherlands Enterprise Agency by 30 June 2025 at the latest.
- Employers with less than 100 employees are not subject to the CO2 reporting obligation. They may, however, voluntarily comply with the CO2 reporting obligation.
UPDATES
5. Untaxed homeworking allowance
- Since 2022, it has been possible to grant employees an untaxed home office allowance of € 2 per day(part) on which the employee works from home. That amount was increased to € 2.13 per day(part) in 2023 and, with an inflation correction, will most likely be € 2.35 per day(part) by 2024.
6. Increase of maximum amount of untaxed travel allowance
- The untaxed travel allowance will also be adjusted. This allowance of € 0.21 per kilometre for business and commuting trips will increase to € 0.23 per kilometre from 1 January 2024, according to the Tax Plan 2024.
7. Work Expenses Scheme
- The fixed exemption in the Work Expenses Scheme over the first € 400,000 of the wage bill for tax purposes was temporarily broadened to 3% in 2023. Since this was a temporary measure, the usual rate of 1.92% will apply again from 1 January 2024.
- This means that the following graduated rates and percentages will apply from 1 January 2024:
- over the first € 400,000 of the wage bill for tax purposes, the fixed exemption is 1.92%;
- over the excess of € 400,000, the fixed exemption is 1.18%.
- If the fixed exemption is exceeded, then payroll tax must still be paid on the excess and in the form of a final levy of 80%.
8. Maximum transition payment
- As every year, the maximum transition payment will be indexed on 1 January 2024. As from that date, the maximum transition payment will be € 94,000.
9. State pension age
- In 2024, the state pension age will be 67 years.
10. Unemployment insurance contribution differentiation
- Since 1 January 2020, as a result of the Wet arbeidsmarkt in balans (Balanced Labour Market Act), a low unemployment insurance contribution has applied to open-ended employment contracts and a high contribution to flexible contracts. From 2024 onwards, the premium percentages will (reportedly) remain the same compared to 2023. The following premiums will therefore apply in 2024:
- low unemployment insurance contribution: 2.64%;
- high unemployment insurance contribution: 7.64%.
BILLS
In addition to the aforementioned legislative changes and updates, we address four more specific bills below:
- Bill on equal opportunities in recruitment and selection
- On 14 March 2023, the Lower House approved the Equal Opportunities in Recruitment and Selection (Supervision) Bill. The bill aims to prevent (whether or not unconscious) labour market discrimination in recruitment and selection in the form of – briefly stated – three obligations for employers and intermediaries. These obligations are explained in more detail below:
- The first obligation means that employers and intermediaries are required to set up a working method aimed at preventing labour market discrimination. The procedure must show that the recruitment and selection process is based on job requirements that are relevant to the position, is transparent and verifiable, and is systematic. Employers with 25 or more employees must record this procedure in writing.
- The second obligation involves a duty to verify. This duty means, on the one hand, that if an employer or an intermediary has another person carry out the recruitment and selection process, the employer or intermediary must verify that that other person has a procedure in place to prevent labour market discrimination. On the other hand, the duty to verify means that the employer and the intermediary must make sure that if automated systems are used, that other person must ensure that the outcome of the system does not give rise to labour market discrimination.
- Finally, the third obligation applies to intermediaries only and involves a procedural and reporting obligation. If an intermediary receives a discriminatory request from a client, the intermediary must have a procedure in place on how to deal with such requests. If, on completion of the procedure, the client’s request still leads to (actual or suspected) labour market discrimination, the intermediary must report this to the Labour Market Inspectorate. The Labour Market Inspectorate is the body in charge of enforcement measures.
- It is also important to note that (under Article 27(1)(e) of the Works Council Act) the works council has the right of consent in respect of any proposed decision to adopt, amend or revoke an appointment policy regulation. The procedure that will be made compulsory under this bill, may be considered such a regulation. It is therefore advisable to request the works council’s consent in a timely manner. If you do not have a works council but do have an employee representative body, you must discuss the procedure (in a timely manner) with that employee representative body.
- The bill is now with the Upper House. As soon as there are relevant developments, we will inform you in our newsletter.
- On 14 March 2023, the Lower House approved the Equal Opportunities in Recruitment and Selection (Supervision) Bill. The bill aims to prevent (whether or not unconscious) labour market discrimination in recruitment and selection in the form of – briefly stated – three obligations for employers and intermediaries. These obligations are explained in more detail below:
- Mandatory confidential counsellor for undesirable behaviour in the workplace
- We previously wrote about the bill to make a confidential counsellor mandatory. This bill seeks to amend the Working Conditions Act with the aim of giving every employee who is confronted with undesirable behaviour in the workplace a legal right of access to a confidential counsellor. A brief summary of relevant parts of the bill is provided below:
- If the bill is enacted, employers will have to appoint a confidential counsellor. For the time being, this obligation will be limited to organisations with at least 10 employees.
- The confidential counsellor may be appointed internally or externally. This bill will allow employers to organise this according to their preference.
- However, the appointment of a confidential counsellor increases the administrative and financial burden for employers. The bill therefore explicitly includes the possibility of appointing an external confidential counsellor – either through a trade association or, for instance, an occupational health and safety service.
- The works council or employee representative body must agree to the choice of the confidential counsellor and his or her positioning, as well as to the extension and termination of his or her appointment.
- The bill furthermore attempts to strengthen the position of an (internal) confidential counsellor in an organisation by granting the confidential counsellor termination protection and laying down basic duties of the confidential counsellor by law.
- Finally, the Netherlands Labour Inspectorate monitors compliance with the law and may impose a ‘demand for compliance’.
- We previously wrote about the bill to make a confidential counsellor mandatory. This bill seeks to amend the Working Conditions Act with the aim of giving every employee who is confronted with undesirable behaviour in the workplace a legal right of access to a confidential counsellor. A brief summary of relevant parts of the bill is provided below:
As stated above, the bill is now with the Upper House, and the plenary debate is expected to take place during 2024. We will inform you further as soon as more information is available.
- Gender Equal Pay Act
- The bill for the Gender Equal Pay Act aims (with an amendment to the Gender Equal Treatment Act) to end the gender pay gap. If the bill is passed, companies with more than 50 employees will be subject to a duty to disclose information on pay differences between men and women in comparable positions. A certification requirement will furthermore apply to companies with more than 250 employees, requiring employers to provide figures on employee pay every three years. A certificate can then be obtained only if the company demonstrably combats unequal pay and demonstrates that it pays men and women equally. In the event of non-compliance, there will be an opportunity for improvement, after which fines will be imposed if the company still fails to comply. The bill is currently still pending before the Lower House. As soon as there are any relevant developments, we will inform you in our newsletter.
- Accreditation system for temporary employment agencies
- Last year, we wrote that the Council of Ministers had approved the bill on compulsory certification for temporary employment agencies on 9 December 2022. This bill has now been replaced by another bill, introducing a Provision of Workers (Accreditation) Act. However, the aim is the same, namely that temporary employment agencies ensure that all their employees work under good working and living conditions. To achieve this aim, an accreditation system will be introduced for temporary employment agencies and other companies that post workers. This will improve the vulnerable position of migrant workers and ensure a level playing field for all suppliers of personnel. To be ‘accredited’, such suppliers must meet set standards, such as having Certificates of Conduct, the payment of a deposit, and evidence that the right wages are being paid and the right taxes are being remitted. Clients may then only use suppliers that have been ‘accredited’. Suppliers must also continue to meet certain conditions after their ‘accreditation’. The obligations for host companies and suppliers will be enforced by the Labour Inspectorate in this regard.
- If the bill is enacted, the accreditation system should enter into force on 1 January 2026. However, temporary employment agencies may apply for ‘accreditation’ sooner. The bill is currently before the Lower House; it has yet to be debated in the Upper House.
Other bills
In addition to the above bills, there are three draft bills for a revised labour market as well as four other bills that are in the pipeline. These are as follows: (i) Assessment of Employment Relationships and Legal Presumption (Clarification) bill, (ii) bill amending rehabilitation obligations in second year of illness for small and medium-sized employer (iii) bill for more security flex workers, (iv) bill to modernise the non-compete clause, (v) bill on the reachability of employees outside working hours, (vi) draft decree on differentiation of unemployment insurance premiums, and (vii) bill on transfer of undertaking in bankruptcy. Although these bills are not yet final, we have addressed them out for you in a separate overview so that you can read more about them in advance if you wish so. The overview can be found here.
If you would like advice on what these legislative changes, updates or bills mean for you, please contact our employment law specialists.