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After 10 years, maximum level for public sector pay enshrined in law

Wednesday 14 November 2012

Salaries in the public and semi-public sector are to be restricted to a maximum of 130% of a government minister’s pay packet under new legislation passed unanimously by the senate on Tuesday evening.

The new law, which has been 10 years in the making, effectively seals top pay scales in the public sector at around €190,000.

The legislation also fixes golden handshakes in the public sector at a maximum €75,000 and bans bonuses, profit sharing schemes and other forms of performance-related pay.

Across the board

The new rules will cover all government departments, plus the healthcare system, housing corporations, education and other public sector bodies. Voluntary agreements are already in place in most areas but are widely flouted.

For example, in September the Financieele Dagblad reported one third of housing corporation chiefs earned more than the maximum agreed for public sector officials.

Of the 285 pay packages which came under the spotlight, 83 broke the official pay barrier. And 25% of the big earners were in charge of small institutions with fewer than 10,000 houses, the paper said.

The new cabinet has plans to reduce the upper limit in line with a ministerial salary at a later date.

A Dutch government minister earns €144,000 a year plus expenses.

A good idea or will it hurt the quality of senior staff? Share your thoughts using the comment box below.

© DutchNews.nl


Readers' Comments

Look at all the messup and one know that senior staff are being overly paid. However, it is good to have a benchmark. It should also cover insurance companies and any corporations that received a certain amount from the government.

By ufo | 14 November 2012 8:30 AM

bravo! fantastic development to control the little boys at the top and their little egos. upper management has been grossly overpaid far too long in NL. it took some time but this is a great step towards a more equal fair and social society.

By Z | 14 November 2012 10:11 AM

It should further be expanded to cover the health insurance companies, ABN/AMRO, ING, and other "private" companies that exists solely thanks to handouts from the tax payers.

By H. | 14 November 2012 3:29 PM

@ufo: private companies should have their wages restricted by public compensation.

130.000/year is not much if you are in finance (or else you go to London earn much more than that)

By A. L. | 14 November 2012 5:09 PM

Banning all forms of performance-related pay is a very, very bad idea. Those jobs will become some cushy jobs once you take away any incentive for increasing efficiency, productivity and competitivity - basically to work harder, innovate become better and better at what you do. Long live the bureaucracy, complacency and mediocrity! Gosh!

By Chris | 14 November 2012 6:35 PM

Sounds like the key issue here is bad HR/ management of salaries across the public sector. To need a national law to regulate this is amateuristic.

By Stewart | 14 November 2012 7:42 PM

The good ones will leave for greener pastures to be replaced by cronies. Ah, to be in power and help your family and friends get a better job with some kickback for you. Wonderful.

By Henk Vandenbergh | 15 November 2012 4:52 AM

@AL: if they think London pays more, they better go and let the more decent people take over their (banker) jobs which they messed up big time so far. London housing also costs much more.

By ufo | 15 November 2012 8:50 AM

Most of the good ones have already left - take a look at the present cabinet for proof. God help us all if the mediocre take over.

By Elizabeth | 15 November 2012 3:32 PM

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