8 questions about introduction of statutory minimum hourly wage
On January 1, 2024, the statutory minimum hourly wage will be introduced. This new regulation will affect both employers and employees and raises a number of questions. In this blog, we address frequently asked questions about the statutory minimum hourly wage and provide you with clear answers to help you prepare for this change.
1. What does the introduction of the legal minimum hourly wage entail?
From January 1, 2024, the Minimum Wage and Minimum Holiday Allowance Act (Wml) will change. It will then become compulsory to pay hourly employees at least the statutory minimum hourly wage. This applies to employees aged 21 and older. For employees under 21, specific minimum hourly wages apply. The minimum hourly wage is indexed on January 1 and July 1 of each year. This means that there are no longer fixed minimum daily, weekly and monthly wages prescribed by law, but one uniform minimum hourly wage for all industries.
2. Will the minimum wage increase with the introduction of the statutory minimum hourly wage?
Yes, for workers who currently earn the minimum wage and have full-time employment of more than 36 hours per week, the introduction of the statutory minimum hourly wage will result in a wage increase. This is because the statutory minimum hourly wage will be derived from the current minimum monthly wage for full-time employment of 36 hours.
3. Will the introduction of the minimum hourly wage make a 36-hour work week mandatory?
No, the introduction of the statutory minimum hourly wage does not change the ability of employers and employees to determine the extent of full-time employment. The parties are free to agree on what constitutes a standard full-time work week. The applicable customary working hours in accordance with the collective bargaining agreement must, of course, be taken into account.
4. How is the amount of the minimum hourly wage determined?
The minimum wage is indexed on January 1 and July 1 of each year. This also applies after the introduction of the minimum hourly wage. The exact amounts will be announced in October 2023 and will take effect January 1, 2024.
5. What does the introduction of the minimum hourly wage mean for collective bargaining wage scales?
Many collective bargaining agreements will have to be adjusted because of the statutory minimum hourly wage. Salary scales at the minimum wage level will have to be revised since the fixed monthly, weekly and daily amounts no longer apply. The calculation of salary scales depends on full-time working hours in an industry and the calendar year of the collective bargaining agreement.
6. How do you calculate wages based on the legal minimum hourly wage?
To calculate the wage, multiply the number of hours worked in a given period by the legal minimum hourly wage.
The formula for this is: wage in period Y = (number of hours worked period Y) x (legal minimum hourly wage).
7. What must be stated on the payslip about the minimum hourly wage?
The payslip must state the applicable statutory minimum hourly wage, based on the employee's age and the period to which the payslip relates.
8. The Minimum Wage Act states a monthly wage; is that the legal minimum monthly wage?
As of January 1, 2024, the monthly wage in the Minimum Wage Act is a reference monthly wage relevant to certain social security laws. The statutory minimum hourly wage must always be used to calculate wages.
For further information and calculation examples, refer to the central government brochure.
Need help with certification in your industry?
Contact our specialist