Deadline for low unemployment benefit extended to July 1, 2020

Probably you may already be aware that with the introduction of the Labor Market Balance Act from 1 January 2020, the amount of the unemployment insurance premium is linked to the nature of the employment contract.


High premium

All flexible contracts (on-call contracts and fixed-term contracts) will have to deal with a high premium. This premium percentage is 7.94%.


Low premium
To be eligible for the low premium, the following cumulative requirements must be met:

  •  there must be a written employment contract or addendum to the original employment contract;
  •  employed indefinitely no later than December 31, 2019;
  •  there may be no on-call agreement.                                                                                     The premium percentage (low rate) is 2.94%.


Why this change?
With this change, the government wants to encourage employers to offer an employment contract for an indefinite period.


Courtesy arrangement: deadline extended to July 1, 2020
The premium rates apply from 1 January 2020. Minister Koolmees previously announced that employers had to provide a written employment contract signed by both parties by April 1st 2020 at the latest. A unilateral confirmation of the provision of the employment contract for an indefinite period is therefore insufficient.

In concrete terms, this means that as an employer you can pay the low premium from 1 January 2020, even if the indefinite employment contract has not yet been laid down in writing or if the indefinite contract or addendum has not yet been laid down in writing or signed by both parties.

Because it is not practically possible for all employers to meet this requirement due to the coronavirus, this period has been extended to 1 July 2020.


What happens if the conditions are not met in time?
If the conditions are not met before 1 July 2020, but the employment contract continues after 30 June 2020, the high unemployment premium will still be payable retroactively from 1 January 2020.

Therefore, write down June 30, 2020 in your agenda and make sure that all conditions are met in time!


Need help?

Do you need help with drawing up a permanent employment contract? Dutch Legal Experts will be happy to assist you!


March 20, 2020