Amendment to the Minimum Wage (under 23 years of age) as per 1 July 2017

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Amendment to the Minimum Wage (under 23 years of age) as per 1 July 2017
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Insights
Date:
22 Jun 2017

Twice a year, on 1 January and 1 July, there is an adjustment of the minimum (youth) wage. On 1 July 2017 the next adjustment will take place.

By:
Hylda Wiarda, Inge Arts

Oftentimes the adjustments to the minimum wage are minimal, since the adjustment is merely meant to reflect inflation. The adjustment taking effect as of 1 July 2017, however, is more significant. This is due to the fact that the age limit for the entitlement to the adult minimum wage will be lowered to 21 as per this date. Presently, only employees in the age of 23 or over are entitled to the full/adult minimum wage. The minimum youth wage for employees in the ages of 18 through 20 will be increased step-wise.

When will the adjustment be implemented?

As per 1 July 2017 the age limit for entitlement to full/adult minimum wage will be lowered to 22 and the first increase of the minimum youth wage range for employees in the ages 18 through 21 will be implemented. It is the intention to lower the age limit for full minimum wage to 21 as per 1 July 2019. The minimum youth wage for employees in the ages of 19 through 20 will in 2019 also be increased.

As per 1 July 2017 the following amounts per month are applicable to a fulltime working week (not including holiday allowance).

15 years of age

€    469,60

16 years of age

€    540,05

17 years of age

€    618,35

18 years of age

€    743,55

19 years of age

€    860,95

20 years of age

€ 1.095,80

21 years of age

€ 1.330,60

22 years of age and over

€ 1.565,50

Compensation for employers

Employers will be compensated for the increase in labour costs for employees in the ages 18 through 21 by means of the minimum youth wage benefit scheme. This scheme will become effective as per 1 January 2018 and will retroactively as of 1 July 2017 provide employers with compensation for young employees with low wages. This compensation will be paid out by the Tax Authorities automatically. For employees in the ages of 22 and over (and as of 1 July 2019 employees in the age of 21 and over), who will start to receive the adult minimum wage, a low income benefit (‘LIV’) will apply. This is also a form of compensation of the costs for employees earning low wages. In order to be eligible for the LIV, an employee must per calendar year have worked at least 1248 hours at an employer and must make between 100% and 150% of the minimum wage.

Exceptions

The increased minimum youth wage for employees in the ages of 18 through 20 does not apply to apprenticeships in the training on the job pathway (‘BBL’). These employees will continue to receive the present minimum youth wage.

For apprenticeships in the training on the job pathway there will apply a step-wise lowering of the age limit for entitlement to the adult minimum wage from 23 to 21 years of age, in which respect the employer can claim LIV.

Please note!

As an employer, please ensure that as of 1 July 2017 the correct (minimum) wage is paid to young employees. The current minimum wages are always published in the Rijksoverheid website. (https://www.rijksoverheid.nl/onderwerpen/minimumloon/inhoud/bedragen-minimumloon-2017)  

 

This article is intended to provide you with ad hoc information regarding new regulatory and case law developments and does not contain any legal advice. If you want to know more on the subject or need legal advice please contact us: info@bd-advocaten.nl