Minimum Wage Fixing Convention, 1970 (No. 131) - Netherlands (Ratification: 1973)

Replies received to the issues raised in a direct request which do not give rise to further comments (CEACR) - adopted 2022, published 111st ILC session (2023)

The Committee notes the information provided by the Government, which answers the points raised in its previous direct request and has no further matters to raise in this regard.

Direct Request (CEACR) - adopted 2019, published 109th ILC session (2021)

The Committee notes the observations of the Netherlands Trade Union Confederation (FNV) received in 2017.

Article 1 of the Convention. Scope of application. Further to its previous comments on differentiated minimum wage rates for young adult workers below 23 years of age, the Committee notes that the Government indicates in its report that in January 2017, the Parliament accepted a wage increase of the minimum remuneration of young adult workers according to which workers from 21 years old will receive the adult minimum wage and workers aged 18, 19 and 20 will get an increase in their specific minimum wage rates. The Committee also notes that the FNV indicates that, while it is content with these developments, it considers that all young workers from the age of 18 should earn the regular minimum wage for adult workers.

Observation (CEACR) - adopted 2012, published 102nd ILC session (2013)

Articles 1 and 2 of the Convention. Lower minimum wages for young workers. The Committee recalls its previous observation in which it noted the comments made by the Netherlands Trade Union Confederation (FNV) concerning the differentiated minimum wage levels for young workers below 23 years of age.

In its reply, the Government indicates that the lower minimum wage rates for young persons strike a balance between two objectives of government policy, namely ensuring that young persons remain in education as long as possible and do not drop out of school, and preserving and promoting employment for young persons who enter the labour market. With respect to the first objective, the Government is of the view that if the minimum wage were to be substantially higher this might encourage young persons to drop out of school and to try to find work, even though they do not yet have the necessary skills. As regards the second objective, the Government considers that an unduly high minimum wage for young workers might result in a loss of employment for this group, as wage costs would no longer match their productivity, and therefore demand for young workers would decline sharply.

While subscribing to the principle of equal remuneration for work of equal value, the Government states that, as a matter of fact, young persons are generally less productive than adults and require more supervision. Therefore, a lower rate for young persons is not unreasonable nor is it inconsistent with the principle of equal remuneration for work of equal value.

The Committee notes that the Confederation of Netherlands Industry and Employers (VNO–NCW) and the International Organisation of Employers (IOE) in a communication dated 31 August 2012 have expressed their full support for the Government’s views in this matter.

Further, the Committee notes the new observations of the FNV dated 30 August 2012 according to which there is no justification for the age discrimination in minimum wages. Recalling that one third of young people between 18 and 23 years old have an independent household, and also recalling that an 18-year old worker receives €658 while the full minimum wage is €1,446, the FNV finds the situation of young adults of 21–22 year-olds particularly distressing. With respect to the Government’s policy to reduce school drop-outs, the FNV considers that even if young persons were tempted by a higher wage, they would still be obliged to return to school in order to get a starting qualification. In relation to the impact on employment of the possible abolition of the lower minimum wages for young adult workers, the FNV indicates that there is no research substantiating the Government’s fear that youth unemployment will rise. Finally, the FNV considers that the notion that young persons are by definition less productive is outdated as young adults can be energetic and may master new skills.

While noting the different views, the Committee considers that affirming that young workers are less productive than adult workers is a generalization which may not hold true in many cases, especially for those young adult workers between 18 and 23 years of age, and which is not corroborated by objective evidence. The Committee also considers that in light of the principle of equal remuneration for work of equal value, remuneration levels should be determined on the basis of objective factors such as the quantity and quality of work performed, and not stereotypical assumptions linking low productivity with young age. The Committee accordingly requests the Government to consider the possibility of engaging broad consultations with all interested stakeholders regarding the advisability of maintaining differentiated minimum wage rates, especially for young adult workers below 23 years of age, in the light of the overriding principle of equal remuneration for work of equal value.

Observation (CEACR) - adopted 2008, published 98th ILC session (2009)

Articles 1 and 2 of the Convention. Lower minimum wages for young workers. The Committee notes the observations of the Netherlands Trade Union Confederation (FNV), which were received on 22 November 2007 and were transmitted to the Government on 17 December 2007, concerning the application of the Convention. More concretely, the FNV objects to the fact that young workers of 21 and 22 years of age are not entitled to the full adult minimum wage. In fact, at the age of 21 a worker earns only 72.5 per cent of the statutory minimum wage and by the age of 22 only 85 per cent. According to the FNV, the Council of Europe’s Committee of Social Rights has already ruled that this situation is not in conformity with section 4(1) of the European Social Charter. The FNV considers there is no justification for the distinction, all the more so as the required age to receive the full minimum wage (23 years) is neither related to the legal adult age (18 years) nor to the definition of adulthood for financial matters or for the expiration of parents’ duty of maintenance (21 years). Referring to the Government’s arguments regarding employment opportunities for young persons and preventing children from dropping out of school, FNV believes there are not objective reasons for denying 21–22-year-old workers the full adult minimum wage. The Committee requests the Government to transmit any comments it may wish to make in reply to the observations of the FNV. Recalling that the question of differentiated minimum wage rates on account of workers’ age has been raised previously in two direct requests, especially in the light of the overriding principle of “equal remuneration for work of equal value”, the Committee would appreciate receiving the Government’s reply in this regard.

Direct Request (CEACR) - adopted 2007, published 97th ILC session (2008)

The Committee notes the adoption of the Minimum Wage and Minimum Holiday Allowance Act (WML) of 5 March 2007 and of the Minimum Wage and Minimum Holiday Allowance Decree of 1 May 2007, which aim to ensure compliance with minimum wages and statutory holidays by applying stricter sanctions in case of violations.

Article 1(2) of the Convention. Coverage of statutory minimum wage. The Committee notes the Government’s indication that “flexi-workers”, such as home workers, may be covered by the statutory minimum wage if they meet certain conditions, such as, for instance, a minimum work of four hours per week over a period of not less than three months. Moreover, the Committee understands that domestic workers and apprentices continue to fall outside the scope of the national minimum wage. It would appreciate if the Government would keep it informed of any progress made with regard to extending minimum wage protection to domestic workers and apprentices.

Article 2(1). Differentiated minimum wage rates on account of workers’ age. The Committee notes the Government’s indication that the Disability (Reintegration) Act (REA Act) was repealed on 29 October 2005 and that currently employers are entitled to apply for wage dispensation, the wage difference being compensated either by the Institute for Employee Benefit Schemes (UWV), or the schemes provided under the Work and Income (Ability to Work) Act (WIA), or the Disability Assistance Act for Handicapped Young Persons (Wajong), so that workers with disabilities are paid at least the national minimum wage. Concerning the reduced minimum pay rates applicable to the age group 15–23, the Committee considers that reducing the minimum pay for young workers by as much as 70 per cent may present some difficulty with respect to the overriding principle of equal pay for work of equal value. Available information also shows that such practice is not very common among European countries and, in any case, the scale of reduction is by far the most pronounced. The Committee accordingly requests the Government to share all available information justifying such minimum wage policy, indicating in particular whether this question has been the subject of consultations with the social partners, and the views that may have been expressed by the employers’ and workers’ organizations concerned. 

Articles 3 and 4(2) and (3). Review and adjustment of minimum wage rates. The Committee notes the information provided by the Government on the system of indexation of the minimum wage to the average wage increase in the public and private sectors measured by the Netherlands Bureau for Economic Policy Analysis (CPB). It also notes that this indexation can be cancelled if the indexation is found to have negative impacts on employment or social security expenditures. While noting the explanations on the wage linking system, the Committee would appreciate if the Government would explain how effect is given to the requirements of Articles 3 and 4 of the Convention, in particular the need to take into account the basic needs of workers and their families and also the need to provide for full consultations with and direct participation of the social partners in the periodic review and adjustment of the national minimum wage.

Article 5. Enforcement measures. The Committee notes the Government’s indication that the WML provides for a monetary fine which can be imposed by a labour inspector and which can amount to €6,700 for failing to pay the minimum wage and/or holiday allowance, whereas previously the Labour Inspectorate could only address a warning to the employer by letter. It also notes that this fine can be raised by 50 per cent if the employer has already been fined in the last 12 months. It further notes that the employer is under an obligation to pay the employee the back pay within four weeks after an order is issued by the labour inspector, failing which an incremental penalty of up to €300 per day, or a maximum of €25,000, can be imposed. Some 6,000 inspections were scheduled in 2007 especially in those sectors representing a high risk of sub-minimum pay or wage arrears, namely construction, agriculture and catering. The Committee would appreciate if the Government would continue to provide up to date information on the practical application of the new enforcement measures, and the results obtained.

Part V of the report form. The Committee notes the statistical information provided by the Government, in particular the fact that the percentage of workers remunerated at the minimum pay rate has fallen in the period 2001–04 from 2.1 to 1.5 per cent, while the percentage of workers earning less than the statutory minimum wage has fallen from 1.1 to 0.6 per cent in the same period. It also notes that according to the Government’s report, young workers, part-timers and women are most affected by problems of underpayment. The Committee would be grateful if the Government would continue to transmit all relevant information on the practical application of the Convention.

Direct Request (CEACR) - adopted 2003, published 92nd ILC session (2004)

The Committee notes the information supplied by the Government in response to its previous comment.

Article 1, paragraph 2, of the Convention. According to the information available, the national minimum wage applies to most of the working population and the only groups that are excluded are domestic workers and apprentices. The Committee understands, however, that the Government has at some point considered the possibility of extending minimum wage protection to domestic workers and that a proposal to this effect was prepared for submission to the national Parliament. The Committee requests the Government to specify any changes which may have been intervened in this respect and to transmit a copy of any relevant text.

Articles 1 and 2, paragraph 1, of the Convention. The Committee notes that in addition to the minimum wage for adults, there has also been a decreed minimum wage for young workers in the 15-24 age group, ranging from 30 to 85 per cent of the national minimum wage according to the age of the young worker concerned. It also notes that, under the law on vocational rehabilitation (Wet REA), employers have the possibility of paying a salary lower than the minimum wage to partially disabled employees by way of dispensation. In this connection, the Committee recalls that, in the absence of any provision in the Convention providing for the fixing of different minimum wage rates on the basis of criteria such as the workers’ age or disability, the general principles laid down in other instruments have to be observed, and particularly those contained in the Preamble of the ILO Constitution which specifically refers to the application of the principle of equal remuneration for work of equal value. In addition, the Committee wishes to refer to paragraph 176 of its General Survey of 1992 on minimum wages in which it concluded that the reasons that prompted the adoption of lower minimum wage rates for groups of workers on account of their age and disabilities should be regularly re-examined in the light of the principle of equal remuneration for work of equal value and also that remuneration levels should be determined on the basis of objective factors such as the quantity and quality of work performed. The Committee would therefore appreciate receiving additional information on this point, including for instance any recent studies and surveys addressing these issues and examining the advisability of pursuing a policy of minimum wage differentials on account of workers’ characteristics such as age or reduced ability to work arising from a handicap.

Articles 3 and 4, paragraphs 2 and 3. The Committee notes the Government’s indications concerning the periodic adjustment of the statutory minimum wage based on the average wage growth following the adoption of the Conditional Indexation Act (WKA) in 1992. While noting that the Convention offers considerable latitude as to the frequency and method of reviewing or adjusting minimum wage levels, the Committee would be glad if the Government would provide supplementary information on the functioning of the minimum wage linking system, in particular with regard to the requirement of the Convention for full consultation and direct participation of representative organizations of employers and workers concerned and also the need to consider factors such as the needs of workers, the general cost of living or the relative living standards of other social groups. The Committee refers, in this connection, to paragraphs 340 and 341 of its General Survey of 1992 on minimum wages in which it emphasized the need to take into account the elements laid down in Article 3 of the Convention with a view to avoiding discrepancies between minimum wage levels and the criteria stipulated for fixing them, in particular when minimum wage levels do not keep pace with changes in the consumer price index, and also stressed that minimum wages should maintain their purchasing power in relation to a basic basket of essential consumer goods.

Article 5 and Part V of the report form. The Committee notes the statistical data concerning reported cases of underpayment which seem to suggest that underpayment mostly affects young employees working part-time and that it is basically due to miscalculation of applicable rates rather than to malicious intent on the part of the employer. The Committee requests the Government to continue to supply all available information on the effect given in practice to the Convention, including the minimum wage rates in force, extracts from inspection reports, statistics on the number of workers who are paid at the minimum wage rate (minimum wage earners as a percentage of the total workforce, male/female proportion among minimum wage earners, etc.), relevant judicial decisions, copies of any recent studies and surveys referring to minimum wage questions, as well as any other particulars bearing on the functioning of the minimum wage fixing machinery.

Observation (CEACR) - adopted 1997, published 86th ILC session (1998)

In its previous comments, the Committee noted the introduction of a new system -- the "i/a" ratio -- to adjust the minimum wage. This is based on the ratio of people receiving social benefit ("i") and wage-earners ("a"). This ratio was at that time evaluated at 86 per cent and, according to the Government, the automatic adjustment of the minimum wage can be cancelled if this percentage is exceeded. The Committee requested the Government to indicate whether the employers' and workers' organizations were consulted in introducing the i/a ratio, and to supply any legislative or others texts that provide for the use of the i/a ratio in determining the application of section 14(5) of the Minimum Wage and Minimum Leave Allowance Act No. 657, of 1968, as amended by Act No. 624 of 1991 (possibility for the Government of not executing the automatic adjustment of minimum wage).

In its report, the Government states that the i/a ratio is part of the explanatory memorandum contained in Act No. 624 of 1991. Before the Act was introduced, the Social Economic Council (SER) was asked for advice about the new minimum wage system. According to the Government, the SER, consisting of representatives of the trade unions, employers and independent experts, has never approved the i/a ratio as the only norm of the minimum wage determination. In their opinion, other elements, like wage growth, development in unemployment, labour productivity growth, etc., should be taken into account.

In addition, the Government states that, during the years 1993 to 1995, minimum wages were frozen in nominal terms. The freeze in 1993 and 1994 were unanimously approved by the SER because of the rapid worsening of the economy, while the minimum wage freeze of 1995 was supported only by the employers' representatives and a majority of the independent members. The trade unions were against this freeze as, in their opinion, both wage growth and development in unemployment were better than in previous years. However, as the i/a ratio was expected to exceed 82.6 per cent in 1995, the Government could cancel the linkage, and made use of this possibility. In 1996 (and also 1997) minimum wages and social benefits were linked to the average wage growth.

As regards the appeal lodged by the Christian Trade Union (CNV) on the minimum wage freeze of 1995, the Committee notes that, in a judgement dated 22 June 1995, the court decided in favour of the Government by confirming, inter alia, that the i/a ratio is indeed the decisive norm although it is not laid down in Act No. 624 of 1991.

The Committee refers to paragraph 282 of its General Survey of 1992 on minimum wages which indicates that the "minimum wage-fixing criteria specified in (the Convention) do not represent precise models; nor do they pretend to give final and unequivocal answers to questions on how suitable minimum wage levels should be determined in a given situation to contribute as effectively as possible to the general welfare". The Committee recalls that the fundamental and ultimate objective of the Convention is to ensure to workers a minimum wage that will provide a satisfactory standard of living.

The Committee requests the Government to continue to provide general information on the manner in which the Convention is applied in the country, in accordance with point V of the report form.

Observation (CEACR) - adopted 1993, published 80th ILC session (1993)

The Committee notes the information supplied by the Government in its report, in particular, the Act of 14 November 1991, introducing a change in the system of fixing minimum wage (1991, No. 624).

The Committee recalls that it requested in the previous comments, in connection with the comments made by the Federation of Christian Trade Unions (CNV), the Government to indicate the extent to which and the manner in which account had been taken of the factors mentioned in Article 3(a) of the Convention.

The Government indicates in the report that after the freeze in 1988 and 1989, the minimum wages were increased in 1990 and 1991 as much as wages in the market sector. It also states that under the above Act a new system was introduced as of 1 January 1992, under which the actual raise of the minimum wage is based on the estimated average wage increase in the market sector and the government sector in the year in question (section 14(1) and (2) of the Minimum Wage and Minimum Leave Allowance Act, No. 657 of 1968, as amended by the above Act). The new Act, however, provides the possibility for the Government of not executing the automatic link under two conditions: the average wage rise being considered too high; and the growth of social welfare benefits resulting in the tax increase (section 14(5)). In such a case, the Government must first consult the Social and Economic Council (section 14(8)). The Government considers that the above two conditions are brought together in the ratio between the number of people receiving a social benefit ("i") and the number of people with a labour income ("a") that is called the i/a ratio, which has recently been 86 per cent. It further states that if the i/a ratio exceeds this 86 per cent, the automatic adjustment of the minimum wage can be cancelled.

The Committee notes these indications. Noting that the concept of the i/a ratio is not provided in the above-mentioned new Act, it requests the Government to indicate whether the employers' and workers' organizations were consulted in introducing this concept, and to supply any legislative or other texts that provide for the use of the i/a ratio in determining the application of section 14(5) mentioned above. The Committee also requests the Government to continue supplying information on the actual adjustment of the minimum wage under the new system.

Observation (CEACR) - adopted 1989, published 76th ILC session (1989)

The Committee takes note of the information supplied by the Government in its report.

It also takes note of the comments of the Federation of Christian Trade Unions (CNV), to the effect that the Government's report does not make it clear whether, and if so to what extent, the factors referred to in Article 3(a) (needs of workers and their families, taking into account the general level of wages in the country, the cost of living, social security benefits and the relative standard of living of other social groups) and 3(b) (economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment) of the Convention have been taken into account, considering that there have been no minimum wage adjustments since 1984. The Federation emphasises that the purchasing power of the minimum wage has dropped and that the lag in the minimum wage by comparison with wages as a whole has increased, and to refers to several recommendations of the Economic and Social Council on the adjustment of minimum wages and on minimum-level benefits, which have not been communicated to the Committee.

The Committee notes that the Government's report does appear to indicate that the basis of the decision to stabilise labour costs by freezing minimum wages was a desire to increase the level of employment, combat unemployment and generally improve the economy, and that, while some account was taken of them, the factors mentioned in Article 3(a) of the Convention had played but an insignificant part. Noting the information in the Government's report on the grant of specific benefits to the lower income groups in order to protect them from the consequences of the freezing of minimum wages, the Committee would nevertheless request the Government to indicate more specifically the extent to which and the manner in which account was taken of the factors mentioned in Article 3(a) of the Convention.