Balanced Labour
Market Act

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On January 1, 2020, the Balanced Labour Market Act (WAB) entered into force. This changed the laws and regulations in the field of personnel and labor.

This law has given (temporary) employees more security and the difference with a permanent job has become smaller. What does this mean for you as an employer? We list the most important changes below.

De belangrijkste wijzigingen

  • Widening of the chain regulation
  • Cumulation in dismissal law
  • Transition payment
  • Better protection for employees
  • Change in social security
  • Legal position of payroll employees
  • Adequate pension

Widening of the chain regulation

The chain regulation determines how often and within what period employees can be offered a temporary employment contract. As a result of the Balanced Labour Market Act, the maximum period of the chain regulation has been expanded from two to three years. This means that you may conclude up to three temporary (consecutive) contracts with an employee in a period of three years. After three contracts in a maximum of three years, the fourth contract must be a permanent contract.

Cumulation in dismissal law

The Balanced Labour Market Act offers the possibility of combining grounds for dismissal (the so-called i-ground). This ground for cumulation makes it possible to dismiss an employee by combining several circumstances that would not be sufficient on their own for dismissal, but would be sufficient in combination. When you use this cumulative ground, the dismissal of the employee is often more expensive. The judge may award a higher severance payment of up to 1.5 times the regular transitional compensation.

Transition payment

As a result of the Balanced Labour Market Act, employees are entitled to transitional compensation from the first day worked. In case of an involuntary end of employment, the employee is entitled to a transition allowance, even if the employee has only been employed by you for a short period of time. Temporary employees on a temporary and secondment basis are also entitled to transitional compensation from day one.

Better protection for employees

The Balanced Labour Market Act offers employees better protection. Employees no longer have to be constantly available to the employer. Employees have the right to refuse a call that has not been made in writing or electronically at least four days in advance. If the employer cancels or changes the scope after the call, the employee retains the right to wages for the original scope of the call. After 12 months, the employer must offer the employee a fixed scope of work based on the average number of hours worked.

Change in social security

As a result of the Balanced Labour Market Act, there are new rules for calculating the social security. The government wants to encourage employers to offer more employees a permanent contract. Therefore, the amount of the social security now depends on the type of employment contract of the employee. In concrete terms, this means that the social security for a permanent contract will be 5% lower than for a temporary contract.

Legal position of payroll employees

The Balanced Labour Market Act provides payroll employees with a different legal status. Payroll employees are recruited and selected by the employer itself, but are paid by a payroll organization. Employees who are given a payroll contract should at least receive the same employment conditions and the same legal status as employees employed by the company. Payroll employees are also entitled to a good pension plan.

Adequate pension

As a result of the Balanced Labour Market Act, payroll employees will be entitled to an adequate pension plan as of January 1, 2021. In concrete terms, this means that payroll employees will no longer have access to the StiPP pension, as is the case for temporary employees on a temporary and secondment basis. Instead, payroll employees are entitled to a pension as prescribed in your collective agreement or industry sector. In addition, the payroll organization may use its own adequate pension plan as long as it meets the requirements of article 1a:1 of the Decree on allocation of work forces by intermediaries.

Download the whitepaper

On January 1, 2020, the now much-discussed Balanced Labour Market Act (WAB) took effect. The whitepaper contains the main points of the new law. In addition, we list 11 concrete action points to help you on your way.

  • The WAB
  • Payrolling
  • Employees
  • Chain provision
  • Transition fee
  • Temporary employment vs. Payrolling
  • Dismissal

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