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When an employer goes into liquidation, the employees are often left with arrears in the payment of their salaries. The liquidation does not cause the employment to be terminated immediately (the receiver still has to terminate the employment agreement), so even after the company goes into liquidation, the employees are still entitled to salary.

The Dutch Unemployment Insurance Act (Werkloosheidswet) provides for a scheme for this situation, also referred to as the Wage Guarantee Scheme. In summary, this scheme entitles the employee to subsequent payment of salary owed for the 13-week period preceding the company’s liquidation, the salary owed for the notice period (a maximum of 6 weeks) and payment of any holidays not yet taken and holiday pay for a period of up to 1 year preceding the end of the employment. This scheme has changed. Until 1 January 2016, the Employee Insurance Agency (UWV) compensated the full salary, i.e. everything that the employee is entitled to under the employment agreement, including expense allowances and third-party rights (pension premiums!). Extraordinarily, there was no upper limit to the amount of the wage. This has changed as of 1 January 2016. As of 1 January, the amount is limited to 1½ times the maximum daily wage (which is the maximum wage that serves as a basis for unemployment benefit). For 2016, the maximum daily wage has been set at € 4,393.00 per month. The Wage Guarantee Scheme has been maximised at 1½ times the maximum daily wage, i.e. € 6,590.00 gross. This means that, in the event of liquidation, employees whose gross salary is higher than that no longer receive their full salary. While, for the portion of the salary that employees are not compensated for, these employees have a (preferential) claim in the liquidation (and sometimes a claim against the insolvent company as well), it is plausible that this group of employees will be less willing to continue working for the curator after the liquidation.

If you have a question about this subject, you can contact Rob Steenhoek.