The future (potential) changes within labor law

Minimum wage

The Cabinet wants to introduce two new laws that will increase the minimum wage. The bill of the Minimum Wage Indexation Act seeks to link the annual indexation of the minimum wage to the increase in the average wage in order to prevent the gap between the minimum wage and the average wage from widening. The bill of the Fairer Income Act seeks to increase the minimum wage on top of regular indexation so that the minimum wage is 60% of the average wage. Both bills are pending before the House of Representatives.

Plans to curtail competition clause

The non-compete clause is often included by default in the employment contract, even though the clause is not necessary in every situation to protect the employer's business flow. The government wants to change this. Minister Van Gennip made her plans known through a parliamentary letter:

• The non-competition clause is legally limited in duration (it is not legally so now, but usually the duration of one year is considered reasonable);
• When including the non-competition clause, the geographic scope must be included, specified and justified;
• Employment contracts of indefinite duration must also justify the employer's interest in including a non-competition clause;
• When the clause is invoked, an employer will in principle have to pay compensation, set at a percentage of the employee's last earned salary determined by law.

These measures should make it less attractive for employers to include a non-compete clause. We will, of course, keep you informed of developments.

Bill to make Confidential Advisor on Undesirable Conduct in the Workplace mandatory

This bill requires employers to appoint a confidential advisor. The bill also provides for the possibility of appointing an external person as a confidential advisor, which may provide a solution especially for small organizations that cannot arrange this internally. Furthermore, the bill regulates a number of basic tasks of the confidential advisor and strengthens the legal position of the confidential advisor in organizations. Nothing is yet known about the effective date of this bill.

Bill on Equal Opportunities in Recruitment Supervision Act

This bill gives the Netherlands Labor Inspectorate supervisory powers over recruitment and selection. The Labor Inspection may check whether recruitment and selection is organized in such a way that employees and intermediaries are given equal opportunities. Nothing is yet known about the effective date of this law.

Bill more security for flex workers

This bill is an outgrowth of the announced labor market reform. The law will take effect at the earliest on January 1, 2026. The bill contains the following proposals relevant to the temporary employment industry:

• Phase A is legally set at 52 weeks. Phase B will be shortened to two years.
• Competition on working conditions must be avoided. Therefore, the working conditions of posted workers must be at least equivalent to those of regular workers.

Bill to amend reintegration obligations in the second year of illness for employees of small and medium-sized employers

The purpose of this bill is to make small and medium-sized employers more agile by providing earlier clarity until what point they must keep the sick employee's own position available for him. In this way, employers can move earlier to replace the sick employee. It is regulated that from the start of the second year of illness, these employers are given the opportunity to focus on reintegration in the second track only if the conditions for closing the first track have been met. The bill includes a new ground for dismissal, allowing the employer to dismiss an employee when the first year of reintegration has been completed and the second track has been started, but the employee recovers while the position has already been filled. It is still unclear when the bill will become law.

Crisis regulation staff retention

Following the example of the Corona period, the Cabinet has established the Crisis Scheme for Employee Retention as part of labor market reform. This scheme is intended for exceptional situations, which fall outside the normal entrepreneurial risk. Employers have two options within the scheme in the event of crisis: redeployment or employee accommodation.

Reassignment allows a company to temporarily unilaterally change the work of staff, by having their employees work in a different position or at a different location. This is so that employees can continue working as much as possible. Employers must then continue to pay their staff 100%.

The concession is designed to help a business owner be able to pay employees' wages over hours that are dropped due to the crisis. This means that a company can receive a financial contribution of 60 percent for wages over hours not worked, with a 23.5 percent surcharge for employer expenses such as employer contributions. The wages taken into account are capped at the maximum daily wage. When using the allowance, a contribution is also requested from companies and their staff. In this way, employers, employees and the government bear the costs together. Nothing is yet known about the effective date of the scheme.