With effect from 1 July 2017 the minimum wage for young people aged between 18 and 22 will be increased. The Upper House has recently adopted the bill to that effect. For employees aged 21 and 22, the standard statutory minimum wage will apply (the minimum wage for adults). The minimum youth wage for 15- to 18-year-olds remains unchanged.
Minimum wage
The increase in the statutory minimum wage is as follows. The table shows the minimum youth wage as a percentage of the adult minimum wage. As of 1 January 2017, the gross monthly adult minimum wage is: € 1.551,60.
| until 1 July 2016 | as of 1 July 2017 | After the second increase | |
| 18 years | 45,5% | 47,5% | 50% |
| 19 years | 52,5% | 55% | 60% |
| 20 years | 61,5% | 70% | 80% |
| 21 years | 72,5% | 85% | 100% |
| 22 years | 85% | 100% | 100% |
Some collective labour agreements specify the minimum wage. If this is lower than the increased minimum youth wage in force as at 1 July 2017, the statutory minimum wage takes precedence over the minimum wage specified in the collective labour agreement.
Exception: BBL
The Minister may grant an exemption for work-based learning placements in secondary vocational education.
Piecework pay
Employers who pay piece rates will soon be required to pay at least the statutory minimum wage on a pro rata basis. This also applies to employees who work at a slower pace than average. This may be a reason to stop using piece rates and instead pay all employees exactly the statutory minimum wage per hour worked.
Higher labour costs
No transitional arrangements apply to the increase in the minimum wage for employers who already employ young people.
The logical consequence for employers who employ 18- to 22-year-olds is, of course, that wage costs will rise. The increase is most severe for 22-year-old employees. From 1 July, these employees will become no less than approximately 17.5% more expensive in one fell swoop. However, the biggest increase is for 21-year-olds: over 37% in two stages.
Business owners who employ 18- to 22-year-olds would be well advised to factor the higher wage costs into their budget and cost price calculations for 2017.
Allowance (minimum youth wage benefit)
The employer will receive a subsidy to cover the higher wage costs. From 1 January 2018, in addition to the wage cost benefits already announced (see our factsheet Labour cost benefits), a labour cost subsidy was introduced to offset the higher minimum (youth) wage: minimum youth wage benefit.
Like the low-income allowance, this allowance is paid automatically to employers who are entitled to it. The relevant data is taken from the wage returns submitted. This includes the following information:
- the employee’s age on 31 December of the previous calendar year;
- the average hourly wage for the calendar year.
The minimum youth wage benefit will not be paid out until the second half of 2019. However, as the increase in the minimum youth wage comes into effect on 1 July 2017, the minimum youth wage benefit for 2018 amounts to 150%.
The compensation for 2018 will amount to approximately:
| hourly rate | maximum per year | |
| 18 years | € 0,23 | € 478,40 |
| 19 years | € 0,28 | € 582,40 |
| 20 years | € 1,02 | € 2.121,60 |
| 21 years | € 1,58 | € 3.286,40 |