Legislative amendments and other developments in the field of employment law as of 1 July 2021

On 1 July 2021 a number of important legislative changes and other developments in the field of employment law have entered into effect. We have set out the most important below.

Extension of NOW subsidy

The next round of the NOW subsidy, the so-called NOW 4, entered into force on 1 July 2021. The conditions of NOW 4 remain largely the same as the conditions of the fifth tranche of NOW 3. The loss in turnover threshold of 20% still applies, the flat-rate surcharge remains at 40%, the subsidy once again amounts to a maximum of 85% of the overall wage sum and the maximum allowance per employee remains twice the maximum daily wage. Furthermore, the possibility to restructure will be continued and the wage sum in the subsidy period may again decrease by 10% compared to the reference month.

What does change in comparison to NOW 3 is the reference month for the wage sum. This will become February 2021. The reference month is relevant for calculating the NOW subsidy and for assessing whether the wage sum has decreased (too much). The new reference month can be both advantageous and disadvantageous. It is advantageous because strict corona measures were in force during the month of February 2021 which have largely been lifted during the subsidy period (July-September 2021). As a result, it will generally be less likely that the wage sum has decreased (as a result of which the final NOW subsidy may be lower). The fact that strict corona measures were in force during the new reference month can also be disadvantageous, as the NOW subsidy to be paid out is based on the overall wage sum in that reference month.

Adjusted regulations in respect of offering on-call employees a fixed amount of working hours
With the introduction of the Labour Market in Balance Act on 1 January 2020, it was stipulated that on-call employees must annually receive an offer for a fixed amount of working hours, equal to the average monthly working hours over the preceding 12 months. From the employers' side, it has been argued that it was unclear what the starting date for the fixed amount of working hours would be if the employee were to accept this offer. Therefore, as of 1 July 2021, the following sentence has been added to the relevant section of the law: "The offer relates to a fixed amount of working hours that shall take effect no later than on the first day after two months have lapsed each time the employment contract has lasted 12 months." In other words: the fixed amount of working hours would take effect on ultimately the first day after the fourteenth month of the period concerned.

Expiration of statutory holidays 2020
The remaining statutory holidays for the year 2020 lapsed on 1 July 2021. Please note: the statute of limitations of 1.5 years only applies if the employer has sufficiently informed the employee thereof.

Higher minimum wage and new calculation rules
The statutory minimum wage increased by EUR 17 gross per month on 1 July 2021. Employers now pay a minimum of EUR 1701 gross (excl. holiday allowance) to employees in the age of 21 or older working on the basis of a fulltime employment contract. As a result of the increase in the statutory minimum wage, the daily wages of benefits have also increased.