To get us started, would you mind explaining what WAB is?
- Sure, WAB is the Balance Labour Market Act, Stephen
and it was introduced on the first of January 2020.
We're going to go into some detail today
around how this impacts both the employer
and also the worker.
- And why would you say WAB is important?
- Wow, I tell you, Stephen,
this is something we're really passionate about
and we've been speaking about, a lot recently,
but in essence, its importance is for this reason,
and this reason alone.
It reduces the flexibility that end-users
or employers previously had when they got to engage
or went to engage payroll workers,
but through the change in legislation it has actually increased
the cost and the cost of engaging these payroll workers
so much so that in some cases it's going to be prohibitive.
- And would you say then,
if companies haven't looked into this,
is it something that they need to look at, pretty quickly?
- Yes, and I suppose Stephen,
this is a ticking time bomb for those companies
that haven't looked at it.
This legislation went live on 1st of January 2020
and what we found is that,
it caught a lot of large organisations
and medium-sized organisations by surprise
and because of the onerous obligations
that this puts on these companies,
if they fail to get it right,
it will have a number of quite serious effects
for their organisation from a compliance perspective.
- So what other changes do employers need
to know around WAB, Connor?
- Sure, Stephen. The biggest one is cost
and there's three real costs that are going
to increase or at least change for the end-users
of payrollers in The Netherlands.
One, is that the payroller will now have
the same rights as an employee,
so they have to have the same pay for example,
same holidays, same bonus, same car allowance,
same access as those employees, right?
And that's going to increase the cost profile
when you engage a payroll worker.
Two, is that those payroll workers will now have to be part
of what's called a mandatory pension scheme
and that's quite costly in The Netherlands.
Three, there's now what's called a transition payment
and this transition payment is payable
when a worker leaves that particular contract
onto the payroll.
So that's going to be quite a significant amount of money,
that transition payment,
particularly as it's based on the tenure of the worker.
So, I guess the longer the worker is there,
the more expensive it's going to be
and that transition payment, Stephen can only be terminated
or reduced by mutual consent.
And it's very unlikely that an employee
or payroll worker will actually agree to that.
- Okay, well, it sounds like there's going to be
a lot of challenges for the employers?
- Yes.
- Have you come across any benefits
that there will be for companies from WAB?
- There is a small benefit.
But that benefit can actually be a detriment,
depending on how you look at it.
But essentially, the benefit is, that
if you engage payroll workers
on what's called an indefinite contract,
you can actually get a lower rate of unemployment insurance.
So I suppose that is a benefit,
when we've talked about and shown
some of the cost that will increase.
- That does sound like there's a lot of costs involved.
It also sounds like there might be
a huge administrative process?
- Agreed, Stephen, I mean the cost is just something
that can't be avoided in any way.
However, the administrative process,
we've seen a huge interest in working with companies
like CXC to lessen that administrative burden
and we've got a lot of experience,
working with companies to help them prepare for this change
and also administer this change as well.
- Thanks very much.
Thanks Stephen.