The changes for HR in 2019
What will HR professionals notice about the plans that the Cabinet has in store for 2019? The budget of the Rutte III cabinet provides a little more purchasing power. But much also depends on employers and trade unions: they have to provide higher wages and conclude an agreement on pensions. Personeelsnet gives an extensive overview here of measures that HR will face in 2019.
HR professionals will encounter many changes next year, such as: an extension of maternity leave, change to the chain scheme, and compensation for the transition allowance.
Personeelsnet below lists the points that HR departments have to consider:
Payroll tax down, VAT up
• People have to take notice in their own wallets that the economy is running again. The Cabinet reduces the wage tax and increases tax credits. The tax bracket in which most people pay taxes will drop from 40.85% to 38.10% in 2019.
• The disposable income increases as a result of the introduction of the two-disc system. The tax rates in the second and third installments are aggregated and aligned step-by-step with the new rate in the first bracket (base rate). In 2021 the combined basic rate will be 37.05%. That is almost 4% lower than now. The new top rate is 49.5%, almost 2.5% lower than now.
• The government will completely abolish the dividend tax in order to keep the Netherlands attractive for multinationals. To cover this measure, the low VAT rate goes up from 6 to 9 percent. We will all notice this because many daily groceries will become slightly more expensive. Also, service providers such as the hairdresser or painter will become more expensive.
• A nicer fiscal measure is the plan to make the (electric) bicycle of the business easier. From January 1, 2020, it is sufficient to add 7% of the new value of the bicycle to the income. As with the company car, you then pay tax on the addition.
Purchasing power is improving if wages increase enough
• Purchasing power is improving for most Dutch people, especially for workers. The average purchasing power increases by 1.5%.
• It is striking that the Cabinet then assumes that wages on average rise by 3%. That is why the government encourages employers to reward their employees more. Should wage growth still be lower, there will still be some increase in purchasing power due to the reduction in income tax and the extra support for families and the elderly.
Labor market in balance
• The government will come up with the new Labor Market in Balance Act (WAB), which contains measures for flexible employment, the dismissal law, and the financing of the Unemployment Insurance Act. This bill will go to the House of Representatives in the autumn of 2018.
• The WAB makes it easier to offer a permanent contract. In this way, the possibilities for the probation period are broadened and there is a cumulative ground for reasonable reasons for dismissal. The difference in the costs of dismissal between flexible and permanent contracts also becomes smaller. This can be achieved by aligning the accrual of the transition payment for fixed and flexible contracts.
• Employers offering permanent contracts will pay a lower unemployment premium.
• At the same time, the possibility for flexibility is extended for recurring temporary (seasonal) work that can be performed for a maximum of nine months in a year. In that case there will be more room to deviate from the chain determination.
• The chain arrangement changes again: the period after which successive temporary contracts are converted into a contract for an indefinite period of time, is again extended from two to three years.
• Call contracts remain possible, but the government will strengthen the position of call staff in order to prevent negative effects, such as permanent availability.
• Payrolls also remain possible, as long as it is only used to unburden the employer and no longer for competition on terms of employment.
• For the long term, the government also wants to see whether the various systems of labor law, social security, and taxation still fit in with a future-proof labor market. That is why the government is setting up an independent committee to examine whether our current system is still in line with the labor market of the future.
Employers receive compensation for transitional compensation
• Employers experience risks when hiring permanent staff, through a stacking of schemes. Small employers, for example, experience the rules surrounding illness and disability as risky and burdensome, so they hesitate to hire permanent staff. The Cabinet will therefore relieve (small) employers in the area of illness, without increasing the inflow into the disability schemes.
• The Transition Allowance Act on dismissal due to business economic circumstances or long-term disability compensates employers from 1 April 2020 for granted transitional payments to employees whose employment has ended after long-term incapacity for work. The scheme has retroactive effect to 1 July 2015.
• To encourage SMEs to dare to hire more staff in (permanent) service, the Cabinet is also sharpening the sharp edges of the obligation to pay a transition payment. The transition allowance for small employers is compensated in case of dismissal as a result of company termination, retirement or illness. This regulation comes on top of the law in which the transition compensation can be compensated if an employee is made redundant after 2 years of illness.
Sham self-employment, self-employed workers and the DBA Act
• The government wants to better regulate the zzp-shelf. People may not be forced to work as a freelancer at low rates. Because this creates unfair competition between workers. Moreover, this undermines the system of social security. The government is therefore going to tackle bogus self-employment and promote appropriate social protection for the self-employed.
• The replacement of the Deregulation Assessment of Labor Relations Act (Wet DBA) is difficult. But the government will continue to work on the replacement of the DBA Act in 2019. With that, false self-employment must be prevented. Furthermore, there should be clarity for the self-employed and clients about the existence or otherwise of an employment relationship.
Increase the statutory minimum youth wage
• In 2017 it was decided to gradually increase the statutory minimum youth wage. As a final step (as of 1-7-2019), employees from the age of 21 (instead of 22 years) will be entitled to the full minimum wage and the minimum youth wages for employees aged 18, 19 and 20 will increase further.
• The minimum youth wage benefit (Youth LIV) compensates employers for these wage cost increases.
Foreign workers and Brexit
• The revised Secondment Directive will be introduced no later than 30 July 2020, including an amended definition of pay. After 12 months of secondment, seconded employees will be entitled to the employment conditions of the host country. Exceptions to this are the rules for dismissal and supplementary pension.
• 30-percent regulation: To retain important temporary foreign employees from abroad (such as knowledge workers), employers may leave 30% of the wages untaxed for them. They thus receive more net pay. The maximum duration of the 30% facility is reduced by three years from a maximum of eight years to a maximum of five years, also for existing cases.
• The government will take measures if it fails with the Brexit and no agreement has been reached with the UK on 29 March 2019. In that case, the access of UK employees in the Netherlands must be arranged. To be well prepared an amendment to the Decree on the Implementation of the Aliens Employment Act is being prepared. It also examines whether adjustment of social insurance laws is necessary.
• In 2019 service providers from other Member States who start work in the Netherlands must report this. A communication campaign will be started for the introduction of the notification obligation. The SZW Inspectorate enforces the notification obligation.
Families, work and care
• As of 1 January 2019, the Work and Care Act will change into two parts:
1. Foster care and adoption leave is extended by 2 weeks to 6 weeks. During the leave, which applies to both parents, a benefit is paid in the amount of the (maximum) daily wage.
2. At the same time, the current maternity leave (now 2 days with pay) will be extended to birth leave with an amount of once the weekly working hours with pay.
• This is realized with the Act on the introduction of extra birth leave (WIEG). Entitlement to leave, from the date of birth, has the spouse or registered partner of the mother, the person who lives with her without being married or the person who has recognized the child. The leave must be taken within 4 weeks after the day of the birth.
• As of 1 July 2020, the birth-leave can be supplemented with five times the weekly working hours of birth-leave. During the additional birth-leave, the employee receives a benefit amounting to 70% of his (maximum) daily wage.
• With effect from 1 January 2019, the basic child allowance will be increased by € 88.75 per year. In addition, the extra AKW allowance will be increased by € 88.75 per year. This extra amount of child benefit is granted to parents with a disabled child living at home who are also single or only earning parents.
• More couples are entitled to a (higher) child-related budget. In order to provide additional support to parents with middle incomes, the income limit for reducing the child-related budget will be increased by € 16,500 per 2020. In December 2019, the Tax and Customs Administration will issue the first (adjusted) advances for 2020.
• In 2019, further efforts will be made to improve the quality of childcare by, among other things, adjusting the professional-child ratio from 1 professional per 4 babies to 1 professional per 3 babies and the introduction of the pedagogical policy officer. With this, the government is focusing on the development of children.
Pension agreement with trade unions and employers needed
• In order to keep up with a changing labor market and to prevent the support for the system from slowly decreasing, it is necessary to change the pension system. The Cabinet wants to retain the strong elements: a collective implementation that ensures low costs, risk sharing that makes life-long payments possible, and the obligation to ensure that a very large number of employees accrue supplementary pension.
• The government has asked the SER to give advice on the pension system. An agreement with employers and trade unions is important because of the conditionality of the supplementary pension. The government hopes that such an agreement will come soon, assuming that the redistribution will disappear via the so-called cross-section system. As a result, pension participants can receive the pension accrual at any time that matches the premium that has been invested for them.
• It should also become more attractive for freelancers to build up pension by introducing more options. The Cabinet is also investigating whether it is possible to have people take part of their pension assets as a lump sum at retirement.
• From September 2019, the expected pension will be expressed in three scenarios at www.mijnpensioenoverzicht.nl: an expected, an optimistic and a pessimistic scenario. In this way, participants gain more insight than now into their expected pension, which also makes it clear that this pension can be higher or lower.
• The automatic value transfer of small pensions commences on 1 January 2019 (less than EUR 474.11 gross per year, amount 2018). From this moment, redemption of a small pension is no longer possible. Pension administrators transfer as many small pensions as possible to the pension provider where pension is accrued at that time. In order to limit the costs at pension providers, very small pensions will expire on 1 January 2019 (from 2 euros or less gross per year).
Health and safety: Healthy and safe work
• The government is starting a multi-year campaign to reduce occupational diseases. In addition, employees who are ill due to their work must be able to claim compensation more quickly and simply than is currently the case. This should encourage employers to provide more protection.
• More labor inspectors are being added to promote fair labor, healthy and safe working, and addressing bogus self-employment. In 2019, the first extra labor inspectors will start working.
• In 2019, research will be conducted into the effectiveness of the new Working Conditions Act, so that it can be evaluated in 2020.
• In addition, occupational physicians must better shape their prevention tasks and cooperate effectively with other health and safety experts. In addition, initiatives are supported to make the profession of occupational physician more attractive, because a shortage threatens occupational physicians.
• The prevention of accidents at work and occupational diseases must improve, especially in smaller companies. The government will examine whether the occupational health and safety policy cycle should be tightened up or made simpler.
Source | Courtesy of the website Personeelsnet.nl