To combat exploitation, underpayment of personnel and unfair competition on the labour market with effect from 1 July 2015 the Sham Employment Arrangements Act (WAS) has been in force.
The law provides for various measures, some of which came into effect as from 1 July 2015 and some from 1 January 2016. Other measures come into effect as from 1 July 2016. One of the measures that came into effect on 1 July 2015 concerns the supply chain liability for clients to make the correct payment of the agreed wage. This is the case for the hiring of personnel from another employer or in the performance of work by an employee of another employer based on an assignment agreement or contracting agreement. If the latter employee does not receive the (full) wage from his formal employer, this employee must make a claim against his employer and in the absence of (full) payment this employee has the option of then holding the client jointly and severally liable. The court rules on the joint and several liability of the client. In practice, by assessing contractors for reliability a liability risk may be reduced or avoided.
Another obligation for employers applicable from 2016 is that they must as a minimum transfer the net legal minimum wage to the employee by bank giro. The net legal minimum wage is equal to the gross legal minimum wage (see above) less the compulsory and permitted deductions, such as pension contributions and wage tax payments. The excess may however be paid in cash. As of 1 July 2016 an additional prohibition on deductions and offsets (e.g. for a traffic penalty or damages charged to the employee) applies for the minimum wage or the payment of part of the minimum wage as reimbursement of expenses.
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