As of January 1, 2016, new legislation applies under the catchy name “Wet Aanpak Schijnconstructies“. This law aims to strengthen the legal position of the employee and the enforcement of labor law in the Netherlands according to the motto “equal pay for equal work in the same place.” Increasingly, there is evidence of evasion of the minimum wage / collective labor agreement wage. Work performed below the minimum wage leads to an unfair playing field for companies and suppression of the labor market for employees. Ultimately, this results in loss of social security contributions and higher (benefit) costs for the government.
The free movement of workers is an important pillar of the EU. Underpayment is also high on the agenda in Europe. In 2014, the Enforcement Directive was established with measures to address, among other things, the underpayment of posted workers from abroad.
Labor migrants from the EU, EEA, and Switzerland are welcome in the Dutch labor market based on European principles, but in practice, they appear to be vulnerable to underpayment. Through (cross-border or non-cross-border) sham constructions, the minimum wage is circumvented, resulting in improper competition based on employment conditions.
According to the new legislation, the employer must demonstrably pay the minimum wage via bank transfer and provide a clear payslip. The legislator wants to prevent underpayment in practice through cash payments or offsets. Examples of this are; offsetting through expense allowances, insurance premiums, or meal allowances, which ultimately result in the employee earning less than the minimum wage.
The joint liability for the payment of the minimum wage for the hirer / subcontractor is laid down in the Civil Code, article 7:616 a through f BW.
These rules apply to all work performed in the Netherlands, regardless of which law is declared applicable in the employment contract / assignment agreement / contract for work.
In the Foreign Nationals Employment Act, in addition to the already existing identification requirement, it is introduced that the employer must establish and report the identity within 48 hours upon request of the SZW Inspectorate of those suspected of having performed work for this employer/client.
In case of violation, the Inspection SZW imposes an administrative fine or penalty. The Inspection can also make the name of the employer public and/or disclose it to employer/employee organizations.
As of January 1, 2016, the following legal regulations apply to all work performed in the Netherlands: – demonstrable payment of the minimum wage and minimum holiday allowance;
– providing an understandable payslip;
– payment of wages by bank transfer;
– fining and public disclosure of companies that do not comply with the statutory minimum wage rules.
As of July 1, 2016: – Structures in which compensation is settled with the minimum wage, resulting in the employee earning less than the minimum wage, are prohibited.
