What does the minimum hourly wage mean for employers and employees?
This year, many employees’ net earnings are higher than previously. In various sectors, employees on average salaries are now earning more than before, particularly employees on the minimum wage and working more than 36 hours a week. Their higher wages this year are the result of the introduction of a statutory minimum hourly wage.
The Netherlands introduced a statutory minimum wage in 1969. This was set monthly and meant, in practice, that employees working 40 hours a week had a lower minimum hourly wage than those working 36 hours a week. The introduction of the statutory minimum hourly wage in 2024 means that all employees on the minimum wage will now earn the same gross salary per hour. For employees working 40 hours a week, that means being paid for 4 extra hours a week this year. Employees working 38 hours a week will get 2 extra hours a week paid.
Young people benefit less
The increase in the net wage will not always apply to people under 21. This is because the starting age for building up a pension is being reduced from 21 to 18. So if an employer provides a pension scheme, employees start paying compulsory contributions earlier.
Higher wage bills
The introduction of the minimum hourly wage means higher wage bills for employers. It may also mean they have to change their employment contracts (or collective labour agreements) and their salary administration systems.
Fair and transparent
The introduction of the new system is intended to result in a fairer and more transparent minimum wage. This will be clearer and the same for everyone. It also means that employees who work more hours will earn more. On top of that, enforcement will be easier.
