Employment law changes Q3&4 2023

‘Change is the only constant”. This also applies to developments in the Dutch Employment Law. Since 1 July 2023, a number of changes to employment law laws and regulations have come into force. We list these, and planned changes that will take effect later this year, for you in this article. The second part of this article will appear on our website next week, listing bills currently in development.

AOW and entitlement to sickness benefit
To encourage the continued employment of employees entitled to AOW, the period of salary continuation for a sick AOW-entitled employee has been reduced from 13 to 6 weeks as of 1 July 2023. After 6 weeks, the employee can claim benefits under the Sickness Benefits Act up to a maximum of 13 weeks.

Vision of parties on reintegration
From 1 July 2023, the employer and the sick employee are obliged to give their vision on the reintegration process in (i) the action plan and (ii) during the first-year evaluation. Employers and employees share responsibility for the smooth reintegration of sick employees. They will have to give their views, par example, on suitable work for the employee and on the advice from the company doctor. The aim of this regulation is to make the employer and the employee more involved in the reintegration and to increase the chances of successful reintegration. In practice, we already often see this being included in the plan of approach. Please note that this regulation applies to reintegration documents drafted after 1 July 2023 and does not apply to already ongoing reintegration processes.

Minimum wage
As of 1 July 2023, the minimum wage is increased from EUR 1,934.40 to EUR 1,995.- gross for employees over 21 years of age, working on a full-time contract. From 1 January 2024 the minimum monthly wage, weekly wage and daily wage will disappear. From then on, employers will be required to pay their employees the hourly statutory minimum wage. This will apply to employees aged 21 and above. Workers under 21 will be paid a fixed minimum youth wage per hour. Because of the difference in the number of workable hours per week (40, 38 or 36), pay was disproportionate in several sectors. The introduction of the fixed minimum hourly wage will end this situation.

Pension regime
From 1 July 2023, the transition to a new pension regime is on its way. Employers need to adapt their pension scheme to the new legislation before 1 January 2028. The ‘Future Pensions Act’ has three goals; 1) a supplementary pension that increases faster, 2) more personal and clearer pension accrual, and 3) a pension regime that better reflects the fact that people no longer work for one employer for 40 years. The pension will still be jointly built and financial risks will also continue to be shared. In the new pension regime, pension providers can use the proceeds from investments more quickly to increase pensions. This also works the other way round; when times are bad, pensions can go down. This can be absorbed as much as possible by the buffers regulated by the new pension law. In the previous regime, most pension accrued at the end of one’s career and there was an implicit subsidy from young to old. Switching employers or unemployment at the end of one’s career therefore had a major impact on pensions. With the new pension regime, the contribution paid by employees at any age benefits their own pension. From now on, a member’s pension constitutes all the contribution paid on behalf of that member, plus the return. This will also make it clearer how much pension has been built up. The pension agreement believe that this law will keep pensions in good shape for people who are already retired, for working people and for future generations.

Act on the Protection of Whistleblowers
Employers with 50-249 employees will have to comply with the new legislation under the Dutch Act on the Protection of Whistleblowers by 17 December 2023 (which is about 3 months from now).

For these employers, the following must be laid down in the internal reporting procedure:

• The internal procedure is also available for reporting violations of European Union law, which will now be classified as wrongdoing.
• A reporting party must receive an acknowledgement of receipt within seven days after reporting.
• Within a reasonable period of up to three months after sending the confirmation of receipt, the employer must provide the reporting party with information on the assessment and how the report has been, or will be followed up.

In addition, the following requirements also apply in this new situation.

The employer must provide all employees who work for the company (under the Act on the Protection of Whistleblowers, this includes not only employees employed by the employer, but also temporary workers, trainees and volunteers, provided they receive compensation for their work) with written or electronic information on:

1. The internal reporting procedure,
2. The manner in which reports of suspected wrongdoing, including breaches of Union law, can be made outside the organization to competent authorities,
3. The legal protection of employees (such as the prohibition of prejudice by the employer after reporting suspected wrongdoing or violation of European law),

The employer must keep the identity of the reporting party confidential unless the reporting party gives permission to disclose his/her identity. It is the employer’s responsibility to ensure that the rest of the staff also comply with this duty of confidentiality. Lastly, the reports must be properly recorded.

Climate targets
From 1 January 2024, new legislation with regard to reporting CO2 emissions of employees will come into force. This regulation, Omgevingswet & Besluit CO2-reductie van werkgebonden personenmobiliteit (Environment Act & Decree on CO2 reduction of work-related passenger mobility), requires organizations with at least 100 employees to start reporting their business- and commuting traffic. This regulation stems from agreements to reduce CO2 emissions in the Netherlands. Organizations with at least 100 employees will have to have their administration in order from 1 January 2024 in order to report 2024 data by 30 June 2025. This reporting will need to include the following data: (i) the total number of kilometers travelled by the employees in a calendar year for business and commuting purposes and (ii) the annual number of kilometers distributed by means of transport and fuel type. Reporting in this way will ensure employee privacy. Before the regulations come into force, a digital platform will be developed for the reporting requirement.

Needless to say, we will keep you informed of further developments of Dutch Employment Law.