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Are you paying your employees sufficient wages?
Every employee (and therefore every foreigner) between 23 and 65 years of age must at a minimum receive the legal minimum wage and the minimum vacation allowance. This is specified in the Minimum Wage and Minimum Holiday Allowance Act (Wet minimumloon en minimumvakantiebijslag). The minimum wage is adjusted twice each year, in January and July. This is based on the Central Planning Office’s forecast of the Collective Labour Agreement (CAO) wage increases for the relevant market sector. For young people between 15 and 23 years of age, the minimum youth wage applies. The level of the minimum youth wage is dependent on a person’s age. That means that a younger person is entitled to an increase in wages after his/her birthday each year up to his/her 23rd birthday. Flexi-workers, e.g. home workers or on-call workers, are also entitled to the legal minimum wage.
The legal minimum wage or youth wage consists of the gross wage for normal hours of work, i.e. without overtime. This wage is paid to an employee over the agreed upon payment term: per week, month or every four weeks. In addition, the employee is entitled to holidays. He/she is entitled to four times the number of days he/she works during a week. In other words, if an employee works five days a week, then he/she is entitled to twenty vacation days (4 x 5 = 20). Finally, your employees are entitled to a holiday allowance. The minimum holiday allowance is 8% of the applicable gross income from employment. It is possible that the Collective Labour Agreement includes different provisions in this regard. Applicable income from employment is defined as: the basic wage, performance bonuses, shift allowance, etc.
Since 1 May 2007, the Labour Inspectorate also verifies that employers comply with the Minimum Wage and Minimum Holiday Allowance Act. A fine may be imposed in case of non-compliance.
For additional information about the Minimum Wage and Minimum Holiday Allowance Act please visit the website of the Ministry of Social Affairs and Employment. For additional information about the Act on the Employment of Aliens (Wet arbeid vreemdelingen) click here. |
