The Executives’ Pay Standards Act (WNT) is an example of dynamic legislation. After the WNT 1, followed by the Act amending WNT, Act to remedy deficiencies in WNT, and WNT 2, a WNT 3 is in the process of being drafted whereby the standards for incomes will have to apply to all employees in the public and semi-public sector as of 1 January 2017. Furthermore, the latest developments under the WNT2 are summarized in this article.
The WNT came into force on 1 January 2013 (WNT 1). The objective of this act is to counter excessive remunerations and severance payments with organizations and institutions in the (semi-) public sector. The act standardizes the level of the incomes and severance payments of top executives and determines that said data must be made public. For the various sectors, such as healthcare, housing corporations, education, culture, public broadcasting networks, other, sectoral remuneration standards apply. The general rules, as well as the specific, sectoral rules of the WNT, have been put into effect in separate implementing regulations and decrees. The general and sectoral remuneration standards are revised or redetermined on an annual basis.
Remuneration standards 2015
With effect from 1 January 2015, the maximum remuneration standard has been reduced from 130% to 100% of a minister’s salary, € 178,000 including expense allowances subject to VAT and pension contribution of the employer (WNT 2). Existing contracts are subject to transfer duty. Furthermore, 2015 is a transitional year for the sectors care and welfare, housing corporations, education and insurance companies. For these sectors, the remuneration standards for 2015 are equal to those of 2014 and will be fully amended to the reduced maximum remuneration limts of the WNT as of 1 January 2016 with the exception of the standards for the insurance companies.
The maximum remuneration limits for members and presidents of internal supervisory bodies of WNT institutions have been increased in 2015, from 10 and 15%, respectively (this used to be 5 and 7.5%, respectively) of the maximum remuneration limit applicable for the legal entity or institution.
For top executives without an employment contract (interim directors), the general or sectoral standardization for 2014 applies in 2015 in case of job performance of more than 6 months, pending the arrangement yet to be determined.
It is important to stay informed of the applicable standards and deviating arrangements. For 2015, the Implementing Decree WNT, the Implementing regulations WNT, audit protocol WNT and Policy Rules application WNT 2015 apply in addition to the WNT. You can consult these current arrangements and decrees on the website of the Minister of the Interior and Kingdom Relations, www.topinkomens.nl. You will also find the current sectoral regulations there, in which deviating remuneration maximums have been determined for the sectors:
- care and welfare
- housing corporations
- education culture and science
- development cooperation
- insurance companies
By order of Minister Plasterk, an exploratory investigation was conducted into the expansion of the scope of the WNT to non- top executives, ‘Exploration WNT 3’. http://www.rijksoverheid.nl/nieuws/2015/07/09/plasterk-presenteert-verkenning-uitbreiding-reikwijdte-topinkomens.html. Several questions arose from that which need to be answered. All the foregoing will be included in the legislative proposal together with the first evaluation of the act of the WNT at the end of December 2015, according to Plasterk. As soon as more is known about the legislative proposal WNT 3, we will of course notify you again.