31-12-2010
Bill on social security on Dutch Continental Shelf

On 21 December 2010, the Upper House adopted a bill on the application of Dutch social security rights on the Dutch continental shelf. Under this bill social security rights for employees working on the Dutch continental shelf will be brought in line with those of employees working on the Dutch mainland.

Under the current system non-resident employees working for a Dutch employer on the Dutch continental shelf, primarily in the oil and gas industry, are not covered under Dutch public social securities. For social security purposes they essentially have to rely on the Mining Work (North Sea) Act (WAMN). However, this Act only affords protection in the event of illness or incapacity for work. National insurances only cover Dutch-resident employees. Dutch residents working for a Dutch employer are also insured under employee insurance schemes.

Since employees working on the Dutch continental shelf will be on a par with employees working in the Netherlands, they will have entitlement to Dutch national and employee insurances. They will be covered by all Dutch national insurances (AKW/ANW/AWBZ/AOW), employee insurances (ZW/WW/WIA), and the Healthcare Insurance Act. For these purposes, working on the Dutch continental shelf is defined as work performed by employees on the seabed and/or subsoil of the submarine areas located outside of the territorial waters of the North Sea. Seagoing vessels do not fall under the scope of this bill. Other specific social security rights apply for employees working on seagoing vessels or comparable installations.

The protection afforded under Dutch labour laws to employees working on the Dutch continental shelf will also be increased. The Working Hours Act and the Working Conditions Act have already been expanded to include all employment on the Dutch continental shelf. With the introduction of this new bill the provisions of the Collective Agreements (Declaration of Universally Binding and Non-Binding Status) Act, Wage Formation Act, Minimum Wage and Minimum Holiday Allowance Act and the Extraordinary Labour Relations Decree will become applicable for all employment on the Dutch Continental shelf. The situation under  the Foreign Nationals (Employment) Act remains unchanged, namely  there is no necessity to grant a permit for work performed on the Dutch continental shelf .

Under the new Act a large number of employees will be required to pay national insurance contributions and healthcare insurance premiums from their first date of employment, and employers will become liable for payment of the employer contribution of the Health insurance act for these employees. This then raises the question whether non-resident employees benefit  from the accrual of, for example, state pension in the Netherlands, whilst they have worked for only short periods on the Dutch Continental Shelf, and have never been or will become a Dutch resident.

With the entering into force of the bill, employers should check whether they have any employees for whom national insurance contributions should be paid through the Dutch payroll. It is also important to check whether this new Act will have labour law consequences for you and your employees.

The bill will enter into force on 1 January 2012.

VMW Taxand will be happy to assist you in determining the potential consequences of the new Act for your company. For any further questions please contact Chris van Wijngaarden, Jimmie van der Zwaan or Martine Hoogendoorn.