The government is taking measures to alleviate the effects of the corona crisis to a certain extent. One of these measures is a one-off extension of the working expenses scheme (WKR). This is important for the employer and employee, but certainly also for the Works Council.
The extension of the working expenses scheme (WKR) means that employers have more opportunities to temporarily help employees outside of their salary.
facts: what is the working expenses scheme?
In the past, there were many different rules within which an employer could provide an employee with things in addition to the salary. These were, in particular, many different tax rules that the employer had to comply with. The agreements about what an employee can receive as far as additional benefits are concerned, are often laid down in collective labour agreements, employee manuals and employee contracts.
Since 2015, all tax rules have been simplified in the working expenses scheme (WKR). The WKR allows each employer to spend a percentage of the total salary amount on untaxed employee benefits. This is a bonus in the form of ‘wages in kind’, such as a fitness plan or Christmas gift packages. This percentage is also called the ‘discretionary spending room’.
the current discretionary spending room of the working expenses scheme
As of 1 January 2020, the discretionary spending room for the first €400,000 of the total salary amount was increased to 1.7%. You can read more about this in this article (Dutch).
temporary extension WKR due to corona
Now, as part of a package of measures (Dutch), the government has announced that this 1.7% will be temporarily increased to 3% discretionary spending room for the first €400,000. Above €400,000, the discretionary spending room remains at 1.2%. The employer does not pay tax on the compensation that falls within the discretionary spending room. Apart from that, the employer pays a final tax of 80%.
expansion WKR only applies to 2020
It is a one-off expansion, which means that the measure only applies to 2020. It is a temporary measure to ensure that employers can provide additional support to their employees in this challenging time.
At the same time, the extended scheme offers an opportunity to help industries that have been hit the hardest. For example, the employer can choose to send all employees a gift certificate or flowers.
role of the Works Council in the expansion of the WKR
Employers decide for themselves whether they use the discretionary spending room and what they use it for. However, the expansion creates possibilities. There are opportunities that the employer may not immediately think of, which is why it is essential to work on this as a Works Council.
According to the Works Council Act (WOR), the Works Council does not have the right to consent to the working expenses scheme. However, as a Works Council, you can apply your right of initiative (WOR Article 23) (Dutch), the right to information (WOR Article 31 and beyond) (Dutch) and the right of promotion (WOR Article 28) (Dutch).
do you have any questions about the working expenses scheme?
Is your Works Council already informed of the expansion of the working expenses scheme? Do you need help with the opportunities this provides you as a Works Council? If so, please contact us. One of the CT² team members will be happy to visit your location for support/advice.
Note: Please note that we are a Dutch organisation and that all our information is originally composed in Dutch. For the benefit of our English-speaking customers we have translated some of our online information. We are still in the process of translating even more of our information. It could therefore be that you will come across Dutch pages on CT2.nl. Please contact us if you would like more information.