Labour market participation in the Netherlands

24th of March 2015
Labour market participation in the Netherlands

Nico Lemmens of ISS Facility Services reports on new Dutch laws affecting the cleaning sector.

On July 1 2014 the Dutch Senate agreed to the so called Participation Act. That same day a proposal for a Quota Act was sent to the Second Chamber, the legislative part of Dutch parliament. Both laws are about employing people with a so called ‘distance to the labour market’. Employers are required to employ a certain minimum number (quota) of such people. Both acts came into effect on January 1, 2015.

The Dutch government has delegated the responsibility for the law’s implementation to municipalities. The national government provides the necessary budgets. Apart from the ambition to help more people with a distance to the labour market to work in a regular job, there is also a savings target of 1.3 billion euros.

Everybody who is subject to the Participation Law from January 1, must set to work with regular employers. Municipalities can compensate employers with wage subsidies. They can also offer job coaching and a no-risk policy to employers.

The wage subsidy is a certain percentage of the statutory minimum wage. At present the lowest pay scale in the cleaning sector is above the level of the statutory minimum wage. The current collective labour agreement does not allow for paying these employees the statutory minimum wage. OSB, the Dutch employers’ organisation in the cleaning sector, therefore wants to reach an agreement with the unions to change the collective agreement in this respect. For people who are not able to operate as a regular employer, sheltered working facilities remain intact.

To mediate between employers and the target group, 35 regional organisations will be established. In these mediating organisations municipalities, employers, unions and UWV (the national implementing organisation for employee social insurances) are cooperating together.

The Quota Act requires employers with 25 or more employees to employ a certain percentage of people in the target group of the Participation Act. If this quota is not met the employer will be fined. The government, employers’ organisations and unions have reached an agreement about a very ambitious target: 125,000 people with a distance to the labour market should be steered into jobs. The national government is responsible for 25,000, the rest shall be employed by the private sector. If this target  is not met by January 2016, a quota will be imposed.

Cleaning companies that already employ people from the target group will not be affected by the new Participation Act.

As a consequence of the new legislation, more handicapped employees will enter the labour market. They will apply directly, without intervention of the UWV. These people are not obliged to inform potential employers that they are part of the Participation Act’s target group. For cleaning companies this is important to know, as these people also can help to meet the quota target.

A special point of concern is the fact that cleaning companies must acquire the competence to coach these people. The government intentions are praiseworthy. However, it remains to be seen whether that government is asking too much from the private sector in general and the cleaning sector in particular.


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