New act to tackle false employment relations in The Netherlands
The Act on Tackling False Employment Relations (Wet Aanpak Schijnconstructies: “WAS”) will come into force in the Netherlands in three phases on 1 July 2015, on 1 January 2016 and on a date yet to be determined . Designed to strengthen the legal position of employees to receive their full agreed wage, the WAS contains several key measures.
- From 1 July 2015, ‘chain liability’ will apply to the payment of wages which have been agreed between an employer and employee. This means that if there is a chain of employers (not necessarily in the same group of companies), for example in the construction sector, the employee can complain to all the businesses in the chain if he does not receive the salary to which he considers he is entitled. Although the direct employer will be initially responsible, if this employer does not pay, or is insolvent or no longer exists, the employee can address the next business in the chain to claim his entitled pay. Chain liability does not apply to individuals who commission assignments from a third party in a private (ie. non professional) capacity.
- From 1 January 2016, it will no longer be possible to pay the statutory minimum wage in cash. To avoid fraud or falsification of receipts, the minimum wage must be paid by bank transfer.
- From 1 January 2016, it will no longer be possible to deduct expenses that cover real costs (such as housing, work clothes, travel) from the minimum wage. To ensure compliance, employers will have to specify all elements of salary on payslips, including any reimbursement of expenses. Failure to do this could lead to a fine from the Labour Inspectorate.
- From 1 January 2016, companies that have received an administrative fine for non-compliance with the laws governing employment of foreigners or the placement of personnel by intermediaries will be publicly named.
- In the future (date yet to be determined), companies will also be publicly named for non-compliance with the laws governing minimum wage, working conditions such as health and safety, and working time.
Employers who are concerned about the implications of the new ‘chain liability’ measures should take reasonable steps to protect themselves against potential claims. This includes only working with certified companies, agreeing clear provisions for payment of employees in any contracts or agreements they enter into, as well introducing periodic checks to ensure that other businesses within the chain are upholding their liabilities.
For further information or to discuss any of the issues raised, please contact Edith Franssen on +31 20 578 54 52 at Loyens & Loeff, Amsterdam – www.loyensloeff.com
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