Labor market reform

In April 2023, the Dutch Minister of Social Affairs and Employment Karien Van Gennip held a briefing on proposed measures to future proof the labour market. As an employer, you may have to make changes that should offer workers more security and make companies more flexible. In this article we will discuss the proposed measures.

Stimulus

At the beginning of 2020 the Borstlap Committee advocated for labour market reform as being necessary and desirable. An imbalance in the labour market was identified as a problem. The solution to this would be to distribute rights, obligations and risks more evenly in the future. Following this analysis, measures are being taken to future proof the labour market. These measures were recently presented to Minister van Gennip.

Objectives of the labour market reform

Putting a stop to 'excessive flexibility' and false self-employment on the one hand, and stimulating entrepreneurship on the other, was translated into two objectives: More security for employees and protection for the self-employed is the first. The second objective is to help companies become more agile. Below you can read which measures Minister van Gennip presented for each objective.

Timetable: Intentions and Commitment

The proposed measures are not yet official, but will probably be implemented. Minister Van Gennip intends to present the legislation to the House of Representatives in the spring of 2024. The measures should then become mandatory by 2025. You are expected as an employer to be prepared for this from 1 January 2025.

Measures for employees and the self-employed

  1. The 0-hour contract will be abolished. Expected effective date: from spring 2024.
  2. On-call contracts become fixed basic contracts for the number of hours for which they are scheduled at least by default. For employees who structurally work more hours, the basic contract must be adjusted. This way, employees will know they where they stand. Expected effective date: January 1, 2025.
  3. Faster security in temporary work. Those who work through an employment agency are more likely to receive a permanent contract.
  4. Tackling 'revolving door constructions', by making stricter rules for temporary work. After three temporary contracts, it is now possible to get a contract again after six months. That will be five years.
  5. There will be compulsory disability insurance for self-employed persons, so that self-employed people will be protected by social security in the event of a setback.

Measures to increase agility for entrepreneurs

  1. Small employers can get clarity on whether they can replace an employee after one year of illness.
  2. The new Employee Retention Crisis Scheme ensures that employers who are affected by a crisis or calamity that falls outside the scope of the entrepreneurial risk (such as during the corona crisis) can continue to employ staff.
  3. Overtime will become less expensive for the employer. At present, overtime is covered by the high unemployment insurance premium rate, the flex rate. Soon this will no longer be the case, for larger employment contracts.

Want to know more about the Dutch labor market reform?

Would you like to read more about the upcoming reform of the labor market? Then you can view the letter to parliament that Minister van Gennip wrote (in Dutch only)   here.