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    Equal pay for payroll employees?

    Minister Lodewijk Asscher of Social Affairs recently informed the Dutch House of Representatives that  for the moment, no legislation on the remuneration of payroll employees will be introduced. In practice, payroll employees are often paid less than the employer's regular employees. This is the reason why MP Mariëtte Hamer tabled a motion in 2014 to level up the remuneration of payroll employees to that of regular employees. The question we will answer below is: what is the current status of the right to equal pay of payroll employees?


    Payroll employees are employed by a payroll company (the employer on paper), but they exclusively and permanently work for one company (the employer). In payrolling situations, employers generally recruit employees themselves, have these employees become employed with a payroll company and work exclusively for the employer. The employer is not bound by the legal and administrative obligations surrounding an employment contract. Payroll employees are paid salary and perquisites by the payroll company. The question is whether the payroll company is required to  remunerate these payroll employees up to the level of the employees of the employer as often perform the same work is being performed. The Placement of Personnel by Intermediaries Act (Waadi) has laid down regulations in this respect. 


    The Waadi applies to companies that supply workers, such as payroll companies. It includes an obligation for payroll companies to provide payroll employees the same working conditions as employees of the employer. Examples of working conditions include salary, working hours, overtime and holidays. Former Minister of Social Affairs and Employment, Henk Kamp, confirmed in 2012 that payroll companies fall within the scope of the Waadi. The payroll company is responsible for ensuring that this obligation is met. Pursuant to the Waadi, it is possible to deviate from this rule in a CLA that is applicable within the organisation of the payroll company or the employer. It is not quite clear what th result is in case provisions in two applicable CLAs conflict with one another. Be that as it may, parties can still ensure by means of a CLA that payroll employees are not remunerated in the same way as regular employees. 


    On the basis of the foregoing, we conclude that since Minister Asscher has announced that no further legislation on payroll employees’ salaries will be introduced, payroll employees will have to fall back on the protection provided by the Waadi. As under the Waadi payroll companies and/or employers can deviate from the protection for payroll employees in the area of equal pay, it will remain attractive for employers to engage payroll companies to employ its payroll employees. The payroll construction is therefore still 'alive and kicking' and will remain so or some time to come.

    If you have any questions about payroll constructions, please contact Cara Pronk or Marjolijn Ebels.