As of January 1, 2020 the Balanced Labour Law (“WAB”) act will come into force
31 december 2019
The changes as of January 1 2020 to the 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.
