Employers beware: pay a lower WW-contribution as of 1 January 2020
Do you comply with the administrative requirements?
On 1 January 2020 the Balanced Labour Market Act (Wab) will come into force. One of the measures is an Unemployment Insurance Contributions (hereinafter ‘WW-contribution’) Differentiation based on the type of employment contract. In short, this means that from 1 January 2020 an employer will pay a low WW-contribution on the salary of an employee with a permanent contract and a high WW-contribution on the salary of an employee with a fixed-term contract.
Please note that the low WW-contribution may only be paid for employees with a written employment contract for an indefinite period of time (not being an on-call contract). This sounds logical, but do all employees within your company have a written employment contract for an indefinite period of time? Or have you upon expiry of a fixed-term employment contract confirmed by letter or email that the fixed-term employment contract would be converted into an employment contract for an indefinite period of time?
If so, the administrative requirements for the low WW-contribution are not met. In principle this means that a written employment contract for an indefinite period of time must still be drawn up for these employees. However, in order to minimize the administrative burden, it has been arranged that employers in such situations can suffice with a written addendum to the original employment contract signed by both parties.
Since not all employers are able to do this before 1 January 2020, the government, in consultation with the tax authorities, has decided to grant employers a further three months to comply with these administrative requirements for the low WW-contribution. This means that employers will be able to pay the low WW-contribution as of 1 January 2020, even if the employment contract for an indefinite period of time has not yet been laid down in writing. However, this is subject to the condition that a written employment contract signed by both parties or a written addendum signed by both parties is present in the payroll administration for these employees before 1 April 2020. Please note that this leniency only applies to employees who joined the company before 1 January 2020.
Would you like to know more about the WW-contribution differentiation? Or do you have any other questions regarding the above, please feel free to contact us.