17 September was Budget Day (Prinsjesdag). The Schoof cabinet presented several measures aimed at reforming the labor market.
What are the cabinet’s objectives, exactly?
The measures are aimed at increasing job security for flexible workers, addressing labor market shortages, simplifying the leave system, and promoting an inclusive and innovative economy. The main points are summarized below:
Measures for labor market reform
- Balanced Labour Market (Flexible Work) Act: This law aims to provide more job security to on-call workers, temporary employees, and agency workers. Flexible contracts will be restricted, and (even) stricter rules will apply to zero-hour contracts and agency work. This will further reduce flexibility (and the flexible workforce) for employers.
- Rules for the self-employed: The Schoof cabinet is continuing the previous cabinet’s approach when it comes to tackling false self-employment. The plans to introduce a mandatory disability insurance scheme for the self-employed are being pursued.
- Clarification of Assessment of Employment Relationships Act (Vbar): There is a lot going on around the bill intended to curb the growth in the number of self-employed contractors in the Netherlands. The bill is now before the Council of State. The aim of this law is to make the distinction between self-employed persons and employees clearer. There is a lot of criticism of the proposal, which is still to be discussed in the House of Representatives.
- Equal opportunities development agenda: From 2025, an agenda will be launched to promote equal opportunities in the labor market, with a focus on objective recruitment and selection procedures. This is being developed in cooperation with the Social and Economic Council (SER) and employers’ organizations.
- Discussion on labor migration: In 2025, the Minister of Social Affairs and Employment wants to start a discussion on which types of work are desirable in the Netherlands and how this relates to labor migration. The focus is on combating abuse and exploitation of labor migrants.
- Non-compete clause: The bill on amending the non-compete clause is also on the agenda.
We will keep you informed of developments. As soon as more becomes known about the status of the above plans, we will report on this in a future Legal Alert.
In addition to the plans above, the following two intentions are also important for you as an employer:
1. Shortening of unemployment benefits (WW) to 18 months
The coalition agreement includes plans to cut back on unemployment benefits (WW). Various options are being explored for this, including extending the notice period for employment contracts in combination with a “gatekeeper test” by the UWV. In addition, shortening the maximum duration of unemployment benefits from 24 to 18 months is on the agenda. The aim is to simplify the process of applying for and providing unemployment benefits for beneficiaries, employers, and implementing bodies.
2. Compensation for the transition payment only for small businesses: MAKE SURE YOU SUBMIT YOUR COMPENSATION REQUEST ON TIME!
Since 1 April 2020, all employers have received compensation for the transition payment they must pay when dismissing an employee who has been ill for more than two years. However, from 1 July 2025, this scheme will be limited to small employers only, i.e. those with fewer than 25 employees. Employers with 25 or more employees will no longer receive compensation from that point onward. Please note: if you are an employer with more than 25 employees, review your workforce for employees who have been ill for more than 104 weeks. If you have not yet presented them with a settlement agreement (VSO), you can still do so before 1 July 2025 and claim under the transition payment compensation scheme.
Do you have questions about this scheme or need help drafting the settlement agreement? Please feel free to contact the business lawyers of The Legal Company via info@thelegalcompany.nl or call 020 345 0152.
