Annual Minimum Salary Increases for Highly-Skilled Workers

IMPACT – Low

What are the changes? The minimum salaries that companies must pay to highly-skilled workers applying for work permits and extensions under various programs, including the EU Blue Card, and the knowledge migrant regulation (“Kenninsmigrantenregeling”), will go up effective Jan. 1, 2014.

Moreover, rather than having to meet salary requirements annually, starting Jan. 1, employers must meet monthly salary requirements and must deposit wages in the foreign worker’s bank account.

What do they mean? Companies wishing to sponsor or continue sponsoring foreign workers under the affected programs in the Netherlands must meet the new salary criteria effective Jan. 1, 2014.

• Implementation timeframe: The new salary requirements apply to applications filed on or after Jan. 1, 2014.
• Visas/permits affected: Entry and Stay permits (“Toegang en Verblijf vergunningen”).
• Who is affected: Companies sponsoring highly-skilled workers, including EU Blue Card and knowledge migrant participants, and some foreign national graduates from Dutch universities.
• Impact on processing times: No impact.
• Business impact: Salary increases will impact business costs in the Netherlands.
• Next steps: Companies should factor in the additional cost of the new salary requirements.

Background: Starting Jan. 1, 2014, minimum salaries will be calculated on a monthly basis, not annually, and companies must deposit salary payments into their employees’ bank accounts.

Under the new salary rates, highly-skilled workers 30 years old and over must earn a minimum monthly salary of €4,048 in gross pay, excluding holiday pay. Certain corporate employees (“sleutel personeel”) must also be paid at this rate.

Highly-skilled workers under 30 must earn €2,968 per month in gross pay, excluding holiday pay. If a worker turns 30 during his or her employment contract, the lower salary minimum applies as long as the employee continues working for the same employer.

Graduates who become employed as highly-skilled employees within a year after graduating in the Netherlands must earn a minimum of €2,127 in monthly wages, excluding holiday pay.

EU blue card holders must earn at least €4,743 per month.

BAL Analysis: Companies should be sure to meet the new salary criteria for applicable employees in 2014. Employers that do not comply with the salary rules may face hefty fines as the Inspectorate SZW, a division of the ministry of social affairs and employment (“Ministerie van Sociale Zaken en Werkgelegenheid”) is empowered to levy fines of €12,000 for each violation.

This alert has been provided by the BAL Global Practice group and our network provider located in the Netherlands. For additional information, please contact GlobalVisaGroup@bal.com.

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