Employment law update: working with freelancers and changes as of Jan. 1, 2025

Fast forward to

I. Changes as of Jan. 1, 2025

1. Indexation of legal minimum wage
2. New premiums Partially Disabled Workers Act (WGA) and Sickness Act (ZW)
3. Change conditions low Unemployment Act (WW) premium
4. Home working allowance up
5. Low-income benefit (LIV) expires in full
6. Changes wage cost benefit (LKV).
7. Transition plan around Future Pensions Act (Wtp) must be ready (pension fund)

II. Updates around lifting enforcement moratorium on DBA law

1. Explanation of labor relations assessment decision and consideration framework
2. Choices for employers
3. Enforcement & fines
4. Opinion bill Clarifying assessment labor relations and legal presumption (Vbar)

III. Recording webinar current affairs labor law: working with self-employed workers

I. Changes as of Jan. 1, 2025

1. Indexation of legal minimum wage

As of January 1, 2025, the legal minimum wage will be indexed by 2.75%. The minimum hourly wage for employees aged 21 and older will then be €14.06 gross (as of July 1, 2024, it was €13.68 gross).

View gross minimum hourly wage amounts by age on the central government website.

1. New premiums Partially Disabled Workers Act (WGA) and Sickness Act (ZW)

The average premium rates for both the Partially Disabled Workers Act and the Sickness Benefits Act are going up as of Jan. 1, 2025. The average rate of the WGA will rise from 0.77% to 0.83%. The average rate of the ZW will increase from 0.45% to 0.50%. 

For more information, see the UWV news release. 

1. Change conditions low Unemployment Act (WW) premium

The WW premium is subject to a premium differentiation. The level of premium depends on the individual agreement an employer has with an employee. For employees with an employment contract for an indefinite period where there is no question of on-call, the low premium applies, in all other cases the high premium applies.

Employers are given some leeway to be flexible with working hours, as employees to whom the low rate applies are allowed to work up to 30% extra hours on top of their regular working hours. However, if an employee works more than 30% extra hours on average, the higher unemployment rate will be applied retroactively for the entire year. For contracts where employees work an average of 35 hours or more per week, this rule does not apply. As of Jan. 1, 2025, this exception will be extended to agreements averaging 30 hours per week.

WW premiums are also going up. The low WW premium will increase from 2.64% to 2.74%, while the high WW premium will rise from 7.64% to 7.74%.

1. Home working allowance up

The untaxed home work allowance will increase by 2.13% in 2025, from €2.35 to €2.40 per day. Employers do not have to pay payroll tax or social security contributions on this amount.

1. Low-income benefit (LIV) expires in full

The LIV is a government financial allowance for employers who employ low-income workers. Its purpose was to stimulate employment in lower income groups.

From January 1, 2025, the LIV will expire completely. This therefore means that employers are no longer entitled to this allowance, regardless of the hourly wage or the number of hours an employee works. The abolition of the LIV is part of broader tax and labor policy reforms and should help simplify regulations.

1. Changes wage cost benefit (LKV).

The LKV for older workers is a subsidy for employers who hire employees aged 56 or older who have been unemployed for a long time. The purpose of this scheme was to increase employment opportunities for older workers with a vulnerable position on the labor market. As of January 1, 2025, the scheme will change for older employees who entered the workforce on or after January 1, 2024. The LKV will be reduced in those cases on January 1, 2025 and abolished on January 1, 2026.

There is also an LKV for labor-impaired workers. This scheme will be widened as of Jan. 1, 2025. Previously, employers received a maximum three-year subsidy when hiring a labor-impaired employee; after Jan. 1, 2025, the maximum period will cease to apply and the subsidy will apply throughout the entire period of employment.

1. Transition plan around Future Pensions Act (Wtp) must be ready (pension fund)

On July 1, 2023, the WTP entered into force. This law radically changes the Dutch pension system, in particular because soon every employee will build up his or her own "pension pot" based on pension contributions to be paid in. Among other things, employers will be required to draw up a transition plan for switching to another pension plan.

For employers who have the pension plan administered by a pension fund, the transition plan with terms of employment must be sent to the pension fund by January 1, 2025.

For more information on the implementation of the Future Pensions Act and a timeline, visit the Working on Retirement website.

II. Updates around lifting enforcement moratorium on DBA law

It cannot have escaped your notice: as of January 1, 2025, the enforcement moratorium on false self-employment will be lifted. In our earlier newsletter, we also discussed at length the state of affairs surrounding the zzp legislation. Since then, the following developments have occurred:

1. Explanation of labor relations assessment decision and consideration framework

On Nov. 1, the Tax Authority published a Explanatory Memorandum Assessing Employment Relationships, Decision and Consideration Framework. The Tax Authority will enforce using the so-called "Deliveroo viewpoints," as established by the Supreme Court in 2023. See also our vlog about this . The Tax Authority will assess the employment relationship holistically, taking all circumstances into account. Points of view that indicate independence as well as points of view that indicate employment are weighed up after which the balance will, in the opinion of the Tax Administration, fall in favor of one of the two sides.

1. Choices for employers

The Ministry of SSW has also created a decision aid for employers and workers, published at the central government website.

1. Enforcement & fines

The Secretary of State has announced that employers and workers will not yet be fined for the first year (i.e., calendar year 2025) if they can prove that they are taking steps against false self-employment. Moreover, the Inland Revenue can only correct retroactively until Jan. 1, 2025, the date of the repeal. See also the central government website.

1. Opinion bill Clarifying assessment labor relations and legal presumption (Vbar)

On Nov. 11, the Council of State, the government's advisory body on legislative proposals, published its opinion on the bill Verduidelijking beoordeling arbeidsrelaties en rechtsverm presumen (Vbar Act). The Vbar Act is intended to replace the Dba Act.

The Council of State has criticized Act Vbar. According to the Council, the proposal falls short in providing clarity and does not solve the core problems on the labor market (being: false self-employment puts pressure on the social system, creates unfair competition on the labor market and makes workers vulnerable). The Council recommends that the bill be thoroughly revised and included in a broader reform of labor law, social security and taxation. The minister has announced that - despite the Council's reservations - he will send the bill to the House of Representatives to continue the legislative process. 

III. Webinar current labor law updates: working with self-employed workers

As of Jan. 1, 2025, the Tax Office is going to enforce compliance with the existing zzp legislation (Wet DBA) more strictly. Are you prepared for these controls? In this webinar, our labor law specialists, Bas Blaauwhof and Sander Poelman, give you all the information you need in one hour to ensure that your organization is compliant and can avoid fines.