On Budget Day 2024, the cabinet presented its plans for the labor market. One of the striking points is that the minimum wage will remain stable for the time being, with only a normal indexation. In addition, measures will be taken to encourage employees to work more hours and subsidies for employers will be cut. What does this mean for your business? We list the main points.
For now, there will be no additional increase in the minimum wage. This means that the only increase we expect in 2025 will be the usual indexation. Depending on inflation, this could be a few percent, but there will be no additional increases as we have seen in previous years.
For businesses, this means that labor costs remain manageable. Although the indexation entails a slight increase, the minimum wage remains stable. This gives companies a little more budget peace of mind, especially in sectors where many workers earn at or just above the minimum wage.
One important incentive that the government is introducing is making overtime more attractive. From January 1, 2025, you will pay less unemployment insurance premium (AWf premium) on extra hours worked by employees. However, this only applies to permanent employees and there is a cap in place: employees may work up to a maximum of 30 percent on top of their permanent hours.
For companies, this means you can reward employees who want to work more without incurring significantly higher labor costs. This measure is especially beneficial in times of peak demand or staff shortages, when you temporarily need more labor hours.
The Cabinet has also announced changes to subsidies for businesses. Two major benefits for employers will be eliminated or reduced:
These changes mean that companies will receive fewer subsidies for hiring low-wage or older workers. For employers that rely heavily on these subsidies, it is important to anticipate this elimination in a timely manner by, for example, investing in other forms of cost savings or in staff that can offer higher productivity in the long run.
A positive point for companies is the extension of the labor cost benefit for employees with labor disabilities. Companies with more than 25 employees can now not only benefit from the labor cost benefit for longer, but also receive a higher amount if they hire more labor-impaired employees than the minimum in the quota regulation of the jobs agreement.
This presents opportunities for employers who are committed to an inclusive labor market. Hiring workers with disabilities becomes more financially attractive, which can help meet staffing demands, especially in a tight labor market.
To support companies during difficult periods, there will be a new wage subsidy. This subsidy is intended for companies that can temporarily offer less work to their staff during crises. It gives entrepreneurs more flexibility and the opportunity to retain staff during a temporary downturn in work, without having to proceed directly to dismissal.
This provides a welcome cushion for companies in sectors sensitive to economic fluctuations. It allows companies to keep their staff employed so that they can get back to full strength faster after the crisis.
The 2024 Budget Day plans have several implications for employers:
For companies, it is important to look ahead and factor these changes into business strategy. At JobPoint we are ready to support you in making the adjustments needed to remain successful in this changing job market. Contact us for human resources consulting and find out how we can help your business grow and prosper in 2025 and beyond.
