Tightening Standards for Remuneration Act approved by Lower House

Tightening Standards for Remuneration Act approved by Lower House

The Lower House has agreed to an amendment of the Standards for Remuneration Act (“WNT”), which came into effect three years ago and caps remunerations in the public and semi-public sector. The intended implementation date of the amending act is 1 July 2017.

20 Feb 2017
Marieke ten Broeke

The amending act is first and foremost aimed at enhancing the effectiveness and implementation of the act. To that effect the new act will encompass capping the remuneration of managers holding several part-time positions adding up to more than one fte in total. The amendment is also aimed at preventing paper constructions in which managers are expressly not marked as top executives in order to avoid being subject to capped remuneration. To that end the definition of an ‘executive officer’ has been expanded; officials that have held the office of executive officer for a period longer than twelve months and remain employed at the same institution following the termination of that executive office, will remain subject to standardisation for a period of four years.

A second objective of the new act is to relieve the administrative burden of in particular smaller institutions that do fall within the scope of the WNT but where the remuneration of executive officers is well below the applicable capped remuneration, or where executive officers are employed non-remunerated, as volunteers. Although the WNT-standards do remain applicable to these institutions, they are exempted from the disclosure and notification requirements. For these institutions the requirement to incorporate remuneration data in the financial statements and have these verified by an external auditor, is waived.

Another important change in relation to the present WNT is that variable remuneration is no longer prohibited. However, the total of the fixed and variable remuneration may not exceed the WNT-standards. Severance payments resulting from a CLA will in the amended act in principle not be subject to WNT-standards.

Meanwhile plans are being drafted for a new WNT. These plans, which encompass amongst other extending the scope of the WNT to all employees in the (semi-) public sector, are currently under assessment by the Council of State. We will keep you informed of the developments in this legislative process.

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