Extension of the minimum wage: additional obligation for the client

The statutory minimum wage applies from 1 January 2018 to all contracts of employment. It does not apply solely to employment contracts with employees.

What does this mean for the client?

At least the minimum wage

For decades, the law has determined the minimum wage and holiday pay to which an employee in the Netherlands is entitled. With effect from 1 January 2018, the minimum wage and minimum holiday pay also apply to the remuneration of overtime worked by employees. This may result in an increase in wage costs.

You must actually pay your employee at least the minimum wage and minimum holiday pay. From 2018, this also applies to overtime. You must not circumvent the rules by deducting costs from the wage, for example for accommodation, clothing and the like provided to the employee. Nor may the minimum wage be undermined by exchanging it for (gross) benefits (for example, under a so-called cafeteria scheme).

The collective agreement for your sector may stipulate that your employee must be paid more than the statutory minimum wage.

The central government explains the new rules in a factsheet.

Contractors

At the lower end of the labour market, employers are circumventing the minimum wage by sacking employees and then having them carry out the work as self-employed contractors.

From 1 January 2018, contractors working under a contract in return for remuneration must earn at least the minimum wage. This contract may be a contract for services, but could also, for example, be a construction, publishing or transport contract.

Self-employed entrepreneurs and professionals are excluded, as they occupy a different position in the labour market.

Obligations

What do you need to do as a client?

1. Check the contracts with your contractors. If the contract shows that you are paying less than the minimum wage (and holiday pay) for the hours worked, you must amend the contract with the contractor before 1 January 2018.
2. You should also ensure that you keep accurate records of the number of hours the contractor works for you and the remuneration paid in return. Your records must show that, on average, you pay the contractor at least the minimum wage (and holiday pay) for the number of hours they work on an assignment.

Minimum hourly wage

The minimum hourly wage depends on the number of hours in a full working week. As of 1 January 2018, the gross minimum hourly wage (excluding the holiday allowance of 8%) is:

Factsheets

To inform employers and employees about the extension of the minimum wage to cover all contracts for remuneration, the Ministry of Social Affairs and Employment has published two factsheets: the Factsheet on the minimum wage for clients and the Factsheet on the minimum wage for contractors.