The salary of a director and major shareholder (DGA) must be at least €45,000 (up to and including 2016: €44,000). A DGA who believes that a lower salary is customary in their situation must provide evidence of this.
Collective Labour Agreement for the Hospitality Sector
The four operators of an Amsterdam grill restaurant each hold between 20% and 35% shares in the private limited company that operates the restaurant. They therefore hold a substantial interest in the company. All four work in the restaurant on a daily basis. Their salary from the private limited company must therefore comply with the standard salary scheme.
Given that the salary paid is well below €45,000, they must demonstrate that the amount they receive is at least 75% of the wage paid to an employee who is not a director-shareholder in a similar employment relationship. To provide this evidence, they refer to the collective labour agreement for the hospitality sector. The grill restaurant is a small restaurant with a simple kitchen. Such restaurants generally pay the minimum wages set out in the collective labour agreement.
Not comparable
North Holland District Court However, it rules that the work carried out by the directors/major shareholders is not comparable to that of employees who are remunerated under the collective labour agreement. The Court found that the restaurant has a fairly extensive menu. Furthermore, the directors/shareholders worked far more hours than staff would typically do. And the directors/shareholders have the final say.
The Court adds that high-performing hospitality staff often receive a higher salary than the collective agreement rate. Furthermore, individual agreements are often made in the hospitality sector.
Part-time
The fact that the director and major shareholder does not work exclusively for the private limited company may serve as grounds for a salary lower than the customary wage. This assertion must also be substantiated by the director and major shareholder. One of the directors and major shareholders attempts to do so, but the Court considers that, given the nature of his work and the fact that he is the driving force behind the restaurant, it is not plausible that he works only a few hours a week. Furthermore, the Court considers that a higher rate of pay should be applied to the hours worked by this director and major shareholder.
Fine
The Court also upholds the fines imposed by the Tax and Customs Administration. These amount to 25% of the additional payroll tax assessed. The private limited company should have been aware that the ‘usual wage’ scheme applied. In this regard, the Court considers that it is incumbent upon the private limited company to contact the Tax and Customs Administration regarding the ‘usual wage’ where necessary.