Major changes that every HR personnel must know in the Netherlands
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2020 was a year that severely disrupted the market. It left many businesses high and dry and several employees jobless. Almost all growth plans were deemed useless and were thrown out of the window. The repercussions of the corona pandemic will be felt in 2021, when we finally start to pick up the pieces and move ahead slowly.
For folks in HR, 2021 will be a busy year for sure! The cabinet has suggested various reforms to support the economy. How and in what way does it affect HR, and what are the new regulations that come into effect this year? Read further to learn more.
Fixed travel allowance, goes down
As employees are recommended to work from home as much as possible, they travel less and as a result they incur lower travel costs. It is recommended by the cabinet that up to and including January 31st, 2021, an employer does not need to adjust the fixed allowance.
However, starting February, 2021, the actual costs will be considered for allowances and benefits in kind. This means employees will receive lower benefits.
Permanent, Flex workers and Self-employed
The cabinet wants to reduce the differences between permanent and flex workers in the labour market for example with the introduction of Labor Market in Balance Act, in Dutch “Arbeidsmarkt in balans”.
For self-employed persons without employees, a compulsory disability insurance (AOV) is included in the pension agreement. The government has also decided to accelerate the phasing out of the self-employed person’s allowance with effect from 2021.
New Pension System
In order to achieve a sustainable pension system, the Cabinet will elaborate the renewal of the supplementary pension system in 2021. The intent here is to submit the legislation and regulations required for this in the second quarter of 2021. The new legal and tax framework will then enter into force in 2022.
Emergency Corona Measures
During Spring 2020 the subsidy scheme “Temporary emergency measure bridging work retention”, in Dutch “Tijdelijke noodmaatregel overbrugging voor werkbehoud (NOW)” was introduced.
The scheme meant employers who had a loss of turnover could still keep their employees in service.
It was subsequently extended until July 01st, 2021. For the first three months, 80% would be paid, after which the payment percentage would decrease by 10 percentage points every 3 months. From January 1, 2021, the revenue loss also had to be at least 30 percent.
Due to the pandemic, most organizations had to scale down. However, we see a different story altogether in healthcare, where a lot of staff have to work overtime.
Normally, in case of too much overtime, employers must still pay the high unemployment insurance premium. But for 2020 and 2021 this rule does not apply temporarily.
The cabinet has earmarked EUR 1.4 billion for an additional social package.
Because of the corona crises, there are several activities which will have no demand in the near future. This means employees will have to be retrained so that they can fulfil other duties within the company where they work or with another employer.
The social package aims to support them and help them adapt to the changing labour market.
There have been agreements about a slower rise in the state pension age along with sustainable employability. The aim is people can reach their state pension age while working in a healthy way.
The cabinet is making EUR 1 billion available in the period 2021 to 2024 to facilitate sectoral tailor-made agreements regarding sustainable employability, working longer and retiring earlier.
Training for employees
To prevent unemployment, the cabinet aims to put more emphasis on skills development and retraining of employees. Therefore, in addition to the corona support package, the cabinet is continuing to work on the introduction of the STAP scheme (Stimulant Labor Market Position), in Dutch “Stimulans Arbeidsmarktpositie”. This scheme will eventually replace the current tax deduction for training.
Approximately EUR 50 million will be available for the SLIM scheme in 2021, which will encourage employers in SMEs, as well as larger employers in the hospitality, agriculture and recreation sectors, to invest in the development of workers.
Extension of Paid Parental Leave
There has been a decision to introduce nine weeks of paid parental leave for both parents. The purpose of this extension is to give both partners the opportunity to spend time with their child in the first year after birth. In addition, the leave can ensure a more equal division of work and care tasks between parents.
During these nine weeks, parents are entitled to benefits up to 50% of the maximum daily wage. The measure will take effect from August 2022.
A change in Childcare Allowance
Previously, parents were not entitled to childcare allowance if they had not paid the full personal contribution. However, from 2021, the Proportionate Determination of Childcare Allowance Bill, in Dutch “Proportioneel vaststellen van de kinderopvangtoeslag” will regulate that a parent is now entitled to childcare allowance in proportion to the amount of costs they have paid to the childcare organization on time.
Measures for re-integration in the event of long-term illness
The bill RIV-test UWV by labor experts regulates that in 2021 the advice of the company doctor on the taxability of the employee will be leading in the assessment of the reintegration report (RIV-test) by UWV.
In 2021, the RIV test will be fully carried out by employment experts from UWV. If the employer and employee have made the reintegration efforts that are appropriate to the medical advice of the company doctor, an RIV test can no longer lead to a sanction. This prevents uncertainty about the reintegration process to be pursued for employer and employee.
Safe and Healthy Working
The cabinet is working on an Arbovisie 2040. Good working conditions policy ensures that people can work healthily and safely. The plan is to improve the handling of claims for occupational diseases due to exposure to hazardous substances at work.
Apart from that, in 2021, emphasis will also be given on tackling burnout with extra attention for working from home and its consequences for the vitality and well-being of workers.
The Multi-Year Risk Inventory and Evaluation (RI&E) program will support companies in drawing up and complying with the RIE in order to improve compliance with this obligation.
Work-related cost scheme (WKR), goes down
Until 2020, 1.2% of the wage bill could be spent by employers untaxed for making provisions and allowances (the so called free-space). However, this has gone down to 1.18% since January 01st, 2021. In this way, the government plans to use the amount saved in targeted exemption of training costs.
Job related investment discounts (BIK), a new introduction
There is an intention to introduce a temporary Job-related investment discount in 2021. This will allow entrepreneurs to deduct a percentage of their investments from the payroll tax.
The cabinet has released around EUR 2 billion for this, and it aims to lower employer costs.
The Aliens Employment Act is being revised to make the Act more flexible and future-proof. It includes a change that a work permit (twv) can be granted for a maximum of three years.
This also includes the change that a work permit/ tewerkstellingsvergunning (twv) can be granted for a maximum of 3 years. In addition, changes are being made to strengthen the position of employees and combat unfair competition. In order to better enable start-ups in the Netherlands to attract international talent, a residence scheme is also being created for essential staff of start-ups in the form of a three-year pilot.
This blog post been written with reference to articles that were first reported on Personnelsnet (Vakkennis voor HR-professionals) and www.rijksoverheid.nl (the official website of the government of the Netherlands). Readers are encouraged to keep themselves updated by gathering information from official sources for further clarifications. Key Hospitality B.V. or the author of this blog post are not responsible for any errors or omissions in law, or for the results obtained from the use of this information. All information in this post is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.