Employers in many sectors are facing the Private Unemployment Benefit Supplement (PAWW) this year. What exactly is this? Has the government created yet another bureaucratic nightmare?
WW
Employees who become unemployed may be eligible for benefits under the Unemployment Act (the WW). However, the government has reduced the duration of this benefit from a maximum of 38 months to a maximum of 24 months. Employers’ and employees’ organisations may enter into mutual agreements regarding a private top-up to the WW benefit for up to 38 months.
These agreements are made within the framework of an overarching collective agreement. This is a collective agreement that is established alongside the standard collective agreement. The umbrella collective agreement is declared generally binding by the Ministry of Social Affairs, with the result that the agreements apply to all employers and employees in the sector.
Such a collective agreement has now been drawn up for a large number of sectors.
PAWW Foundation
Private schemes are not administered by the body that administers unemployment benefit (that is, the UWV), but thanks to the organisation set up specifically for this purpose PAWW Foundation. The SPAWW has established its own system for the periodic declaration and invoicing of contributions. Employers must register with the SPAWW to pay these contributions and must fulfil their obligations regarding declarations and payments.
The contributions payable under the scheme are borne by the employees. In 2019, this amounts to just 0.3% of their wages.
The contributions are paid by the employer. However, the employer deducts them from the employees’ gross wages.
Employees who become unemployed can apply to the SPAWW for a supplement to their unemployment benefit. However, the number of employees who have been unemployed for so long that they are eligible for this benefit (more than 24 months) is very limited.
Monstrosity
With the PAWW, the government appears to have created yet another monstrosity. For a relatively small number of situations, employers are being saddled with far-reaching new administrative burdens. Employers are obliged to participate in the implementation of the scheme. The administrative burdens fall on them. The costs of the PAWW’s administrative apparatus are covered by the contributions paid in.