WAB 2020: avoid the higher unemployment insurance premium

12 December 2019

Do you have employees without an "indefinite contract"? If not, the unemployment insurance premium will be 5% higher starting 1 January 2020.

To prevent this, the following may be agreed in writing with certain employees before 1 January 2020: 

  • employment contract for an indefinite period 
  • fixed scope of work (no 0-hours or min/max) 

It has now been approved that these administrative requirements for the low unemployment insurance premium must be arranged before 1 April 2020 at the latest. This only applies to employment contracts of employees who entered service before 1 January 2020. 

The Labour Market in Balance Act (WAB) will take effect on 1 January 2020. The purpose of this act is to improve the balance between permanent and flexible employment contracts. The main changes are: 

  • unemployment insurance premiums for flex workers are 5% higher 
  • upon termination of the employment contract (at the initiative of the employer), the employee is entitled to a transition allowance (severance payment) from day one 
  • a new ground for dismissal, being the ‘cumulation ground’ (sum of one or more grounds for dismissal) during a 3-year period, a maximum of 3 fixed-term employment contracts can be concluded with the employee 
  • for the payroll-worker at least the same employment conditions and legal position apply as for employees employed by the hirer 
  • a written calling period of at least 4 days applies for the on-call worker; the on-call worker is also entitled to a contract offer for a fixed scope of work after an on-call contract of 1 year.

By our partner LIMES International.