Work/Life: international employment news update

Issue 62

A hectic week for employment policy, with tax cuts, energy bill grants, and frantic UK employment policy formation as the UK seeks to define itself as internationally competitive. Join us for our webinar on this on 26 October 2022.

German employees receive €300 energy bonus

In response to energy inflation in Germany, the federal government has granted workers in Germany a one-off payment of €300 for the month of September. The amount is paid gross with regular monthly salary and is taxed at different rates depending on the employee's salary level.

The energy bonus has been viewed critically by some as a "drop in the ocean" which excludes pensioners and students.

Netherlands could give bonuses to full time workers to fight staff shortages

The Cabinet may take steps towards reducing endemic staff shortages in the Dutch labour market by making it worth it for people to work more, according to coalition parties VVD and D66. A majority of parliament were in favour of a proposal to provide employees with a bonus for working full time and called on the Cabinet to put a plan in place by December. The Cabinet is considering both long term and short-term ways to deal with staff shortages, which could expand on the bonus plan which was initially intended just for people working in education or care provision.

UK part-timers forced to look for more work

Kwasi Kwarteng has declared that part-time workers could face benefit cuts if they do not look for more work. The Chancellor's mini-Budget contains reforms to the welfare system and protections to part-time workers working up to 15 hours a week on the National Living Wage could be affected as a result.

French Labour Minister to tighten entitlement to unemployment benefit

In the preparation of the unemployment insurance reform bill, the French government is aiming to reduce the cost of unemployment insurance. On 27 September, the Labour Minister announced that he intends to provide in the bill that employees who are dismissed after abandoning their job will no longer benefit from unemployment allowances.

Collective grievance brought against Bolt over holiday pay

A collective grievance has been brought by the GMB union on behalf of Bolt drivers over holiday pay in an attempt to claim "future and past drivers' earnings". The GMB union maintains that the collective grievance is in line with the UK Supreme Court's industry standard for holiday pay and that Bolt should "pay drivers what they are legally owed".

Visa schemes to be reviewed by UK Prime Minister to fix labour shortages

Liz Truss is to review the UK's visa system to tackle economic growth and labour shortages in important industry sectors such as hospitality and farming. The government could potentially use migrant workers as a way of helping businesses fill vacancies.

The government's migration reform plans are set to be announced later this year.

A rise and a reversal: changes to the UK Living Wage and National Insurance contributions

The Living Wage has risen by 10% to £10.90 an hour across the UK and to £11.95 in London. This record increase and was brought forward ahead of the scheduled November rise due to the cost of living crisis. Some companies have criticised the increase due to the expense that this change will bring.

Chancellor Kwasi Kwarteng announced in his mini-Budget that from 6 November, the 1.25% rise in the National Insurance contribution rate will be reversed. Plans to levy social care and fund health will also be scrapped and will now come from general taxation. It is estimated that approximately 920,000 firms will get a tax reduction of nearly £10,000.

Polish government announces Poland’s highest ever minimum wage rise

The Polish government has announced that the minimum wage will rise by PLN 590 (EUR 122) next year to PLN 3,600 (EUR 744) before tax. That is the highest ever annual increase with a rise of almost 20% and is the largest in 15 years.

IR35: 2017 and 2021 reforms scrapped

The Chancellor announced in his mini-Budget that from 6 April 2023, the IR35 2017 and 2021 reforms will be axed. This will mean that the responsibility for determining employment status and payment of the appropriate amount of tax and National Insurance contributions will shift back to self-employed workers providing their services via an intermediary, rather than the end client.

Entrepreneurs struggle to repay coronavirus support, deferred income taxes

Entrepreneurs are struggling to keep their business afloat after the financial strain of multiple coronavirus lockdowns and the new challenges of soaring inflation and energy prices. But now, they face repayment of excess coronavirus support and deferred income taxes - which trade associations warn could lead to bankruptcies, according to De Volkskrant.

Slovakia pioneers in introducing Europe-wide pension product

Slovakia is the first country in the EU to launch a European pension product which was approved by the Slovak Parliament in March and is available to any person living in the EU with transferability in all EU countries. The new European-wide personal pension product (PEPP) will be on a voluntary basis, aimed mostly but not exclusively at younger individuals who work or plan to work in other EU countries.