Work and Wages

Minimum Wage

Minimum Wage is regulated in Netherlands through the Minimum Wages and Minimum Holiday Allowances Act (Wet minimumloon en minimumvakantiebijslag) while the wages of young workers are governed by the Decree concerning Minimum Wages for Youth Workers of 29 June 1983 (Besluit Minimumjeugdloonregeling), as amended up to 20 July 2012.

Worker and Employer are free to determine wages in an employment contract however provisions of Minimum Wages and Minimum Holiday Allowances Act must be taken into account. Workers cannot be paid less than the statutory minimum wage specified for a particular age group. Nearly 80% of the workers are covered under sectoral or enterprise level agreements and are entitled to pay scales provided in these agreements. Legislation provides for different pay scales for workers aged 23 and over and for young workers (aged 15-22).

The amount of minimum wage is adjusted every 6 months (on 1 January  & 1 July) based on the average development of negotiated wages in the country. Other than level of negotiated wages, social security benefits, economic development and level of employment is considered while fixing the minimum wage. The current adult minimum wage (23-65 years) applicable from January 1, 2015 is € 1,501.80 per month, € 346.55 per week, and € 69.31 per day. The minimum wage rate applicable to young workers is actually a percentage of adult minimum wage rate. The minimum wage for young workers ranges between 30% (15 years) to 85% (22 years) of the adult minimum wage. The daily and weekly minimum wage is calculated at 3/65 and 3/13 of the monthly minimum wage respectively.   

The above mentioned wage rates apply to the full time workers. The full time work week ranges between 36-40 hours, depending on the sector in which a worker is employed and is usually determined in a sectoral collective agreement. The hourly wage rate is thus determined while considering the weekly full time working hours in a sector. The hourly wage rate is € 9.63 for 36-hour work week, € 9.12 for 38-hour work week, and € 8.66 for 40-hour work week. 

The wage rates applicable from July 1, 2015 for adult workers are € 1,507.80 per month, € 347.95 per week, and € 69.59 per day. The wage rates for young workers similarly range from € 452.35 (for workers aged 15 years, paid at 30% of adult minimum wage) to € 1,281.65 (for workers aged 22 years, paid at 85% of adult minimum wage). The hourly wage rate for adult workers is also adjusted and is € 9.67 for 36-hour work week, € 9.16 for 38-hour work week, and € 8.70 for 40-hour work week.

sources: Minimum Wages and Minimum Holiday Allowances Act of 27 November 1968  ; Decree concerning Minimum Wages for Young Workers of 29 June 1983; Decree on the Adjustment of Minimum Wage from 1 January 2015; Decree on the Adjustment of Minimum Wage from 1 July 2015

Regular Pay

The term wage means the cash income from employment except premium for overtime, holiday allowance, profit distribution, benefits on special occasions, etc. (section 6(3) of the Minimum Wage Act)

Wages may consist of the following elements: money (cash); goods for personal use (except liquor and drugs/harmful substance) if it is desirable in view of the nature of the enterprise of employer; accommodation/housing including lighting and heating; services and supplies, activities provided by the employer including education, board and lodging; and shares, claims, stocks, vouchers and receivables

The only condition regarding in-kind payments is that the employer cannot assign a higher than the real market value to goods for personal use, accommodation and board & lodging services.

An employee must be paid his/her wages at the pre-determined/agreed time on daily, weekly, four-weekly or monthly basis. The maximum wage payment period is one month. Payment may be made in cash or to a bank account and should be in the Dutch legal tender, unless agreed otherwise. Wages may be paid at the workplace, at the employer's office or at the employee's home. As part of the present Minimum Wage Act the employer is required to pay at least the amount of minimum wage to the worker’s bank account. 

Wages must be paid a week after the wage period but not later than a month. The period can be extended on the basis of a written agreement however the extended period cannot be longer than one month in case the weekly wage (or even less than a week) and three months in case of monthly wage. If wages are delayed from the agreed periods and non-payment is attributable to the employer, employee is entitled to certain increase in wages.

On the occasion of wage payment, an employer must also provide a written or electronic itemised pay slip indicating the amount of wages, their composition, deductions, working hours and amount of statutory wage that person of the worker's age is entitled to.

A contractual provision which gives an employer the right to withhold worker's wages on the pay day is null and void unless the workers has given a written consent allowing certain deductions to make payments such as contributions to occupational pension schemes, repayment of wages paid in advance or overpaid wages, rent for accommodation linked to the job, and compensation or penalties in certain limited circumstances.

sources: §616-633 of Book 7, Title 10 (Employment Contracts) of Dutch Civil Code (Burgerlijk Wetboek), Minimum Wage Act (Article 7, §2, Stb. 2015, 233).