Netherlands: Latest working life developments – Q1 2017
Changes in legislation on the statutory minimum wage, the continuing fall in unemployment, a levelling of the pension age and recent parliamentary elections are the main topics of interest in this article. This country update reports on the latest developments in working life in the Netherlands in the first quarter of 2017.
On 1 January, the adult minimum wage in the Netherlands increased to €1,551.60 (see a recent overview of developments in statutory minimum wage in Europe).
On 25 January, the government approved an amendment to the law on minimum wage (PDF). Changes in its provisions include:
- a gradual lowering (from 23 to 21 years) of the age required for entitlement to the adult rate;
- the lower statutory minimum wage rate for younger people remains, although the rates for young people aged 18, 19 and 20 years will increase in order to limit the risk that differences in ages (and levels of minimum wage) could play a role in company hiring practices;
- piece workers will earn at least the statutory minimum wage;
- the statutory minimum wage will also apply to extra hours worked by people in part-time work.
Discussion on entitlements for workers employed under a service provision contract (overeenkomsten van opdracht), particularly in the postal sector, restarted at the end of 2016 after being originally initiated in 2013. A law to limit the abuse of these contractors was adopted on 28 March, extending the entitlement to statutory minimum wage to these workers (about 50,000 people, not active on the basis of a labour contract).
Unemployment continues to decrease
In January, Statistics Netherlands released unemployment figures for December 2016. In comparison with the previous year, unemployment fell from 588,000 to 482,000 people (a fall of 18%, the largest decline in 10 years). The unemployment rate is 5.4%, the lowest level since 2011. This fall covered concerned all workers, but is particularly evident for younger ones. In 2016, younger unemployed workers (aged 15–35) were most likely to find a new job within three months (1 in 3). Older unemployed people (aged 55+) still run a higher risk of becoming long-term unemployed (1 in 15 found a new job within three months).
Pension age no longer rising
For the first time in 10 years the average pension age of workers did not, in practice, rise, standing at 64 years and five months. Early this century it stood at 61 years. Ending financial incentives to early retirement and a gradual rise (after 2012) of the eligibility age to statutory old age pension benefit influenced this development.
Prime Minister Mark Rutte claimed victory at the parliamentary elections on 15 March and declared the Netherlands said ‘stop’ to the wrong sort of populism. Although Geert Wilders’ Freedom Party gained seats, the results did not match the strong projections prior to elections. As things stand, the Freedom Party will not take part in talks on forming a coalition government. Results were welcomed by the political establishment in Europe, especially after the 2016 Brexit vote in the UK and in view of forthcoming elections in France and Germany.