Workers over the age of 21 are entitled to receive the national minimum wage. The Dutch government adjusts the minimum wage twice a year – on 1st January and 1st July – in line with the development of collectively agreed average wages.
The new amounts for the Dutch minimum wage
The law does not set a minimum hourly wage because the number of hours in a working week can vary from one company to another. Therefore, a monthly minimum wage is established for all full-time workers: as of 1 July 2022, each worker over the age of 21 must receive a gross monthly minimum wage of € 1.756,20. Considering a working week of 40 hours, the minimum hourly wage is thus € 10,14.
For workers up to the age of 21, the minimum youth rate applies, the monthly amount of which varies from a minimum of € 526,85 (employees aged 15 years) up to € 1.404,95 (workers aged 20 years).
The Beneficiaries of the Minimum Wage
All workers from the age of 15 are entitled to the national minimum wage (until the age of 21 the minimum youth wage applies).
The minimum wage also applies to flexible workers, such as on-call and work-from-home employees. Project collaborators are also entitled to the minimum wage, as well as part-time workers.
However, the measure does not apply to self-employed workers, as they have a different position on the labour market.
Components of the minimum wage in the Netherlands
The minimum wage consists of the basic wage and a number of allowances, e.g. for shift work and irregular hours. Some income components, such as overtime pay, are not included in the calculation of the minimum wage.
The minimum wage is calculated on the basis of gross pay consisting of:
- the basic pay agreed in the contract;
- performance-related payments and allowances for shift work, irregular hours, etc;
- fixed weekly or monthly payments in relation to the turnover produced;
- work-related payments from third parties, e.g. tips or payments agreed between the employee and the employer;
The total of these amounts may therefore not be less than the minimum wage set by law. For the purpose of calculating the minimum wage, the following amounts are not to be taken into account:
- overtime;
- leave allowances;
- profit shares;
- special payments (e.g. fringe payments received for achieving sales targets);
- future payments received under certain conditions (e.g. pension and savings plans to which the employer contributes);
- expense allowances;
- year-end allowances.
Sanctions for non-compliance with minimum levels
The Dutch Labour Authority can request an employer’s payroll records if it suspects that the employer is violating minimum wage regulations.
If the employer’s payroll records do not comply and/or the employees’ wages cannot be checked, the employer can be fined up to €12.000.
If the authorities find that an employee is underpaid, the employer is obliged to pay the wages due within four weeks. If this does not happen, the labour authority may impose a fine of €500,00 per day per employee up to a maximum of €40.000 per worker.
In addition, employers who do not pay their employees properly can be fined up to €10.000 per employee.
In case of repeated offences within a period of 5 years related to the payment of wages, the penalties can be doubled or tripled. The company also risks being closed for a period of up to 3 months.