Written employment contracts essential for low Unemployment Insurance (‘WW’) contributions!

The New Year also marks the operational start of the Balanced Labour Market Act (‘Wet arbeidsmarkt in balans‘). As you will know, this also entails the introduction of a new system for the WW contribution. The sectoral classification is abolished, to be replaced by high and low rates, depending on the type of contract that the employee has. The low rate applies to indefinite employment contracts with fixed working hours and the high rate – with a few specific exceptions – applies to other contracts (temporary, zero hours, min-max).

Please note: if you want to qualify for the low WW premium rate next year, the indefinite employment contracts must be confirmed in writing. If you have tacitly renewed employment contracts indefinitely in the past, without confirming this in writing, you have up until 31 March 2020 to get this done. It might sound completely unnecessary if it is clear to everyone that an indefinite contract has come into place over the years, but this is now a legal requirement. It can be done by means of a written addendum signed by both parties. An extension letter, confirming that the employment will henceforth be for an indefinite period of time, will also be enough as long as it has been signed by both parties. Finally, a digital signature as well as consent via e-mail or in an HR system also suffices.

For employment contracts that are extended for an indefinite period of time on or after 1 January 2020, the requirement that the extension has to be recorded in a written employment contract or a written addendum applies immediately.

Please contact Lise van den Heuvel or Anna Görgün for more information or advice on this subject.

This article was published in the Newsletter Vestius of January 2020