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Reform of sheltered work policy (WSW)
Country of implementation
General short description of the innovation
Since 2005 a number of reforms have been implemented in the act on sheltered employment (WSW).This act regulates activation into work of people with severe physical and, often, psychic and cognitive disabilities. The overall objective is to increase labour participation of this target group with regular employers, according to their capacities and to decrease the number of people working in sheltered work outside the regular labour market.
Type of Policy
Duration of the policy
Reforms have started mainly since 2005, but are not complete yet. In 2015 a new Participation Act is due, which includes the current WSW.
Scope of innovation
- Scope: structural
- Number of intended beneficiaries: Around 100.000 persons working with acknowledged WSW-status
- Spatial coverage: national
General description of (intended) objectives and strategies
The objective of this reform is to stimulate participation of severly handicapped with a special WSW-status in regular companies, to reduce the number of workers in sheltered work and to reduce the costs of the implementation of this act. Workers within the WSW have their own collective agreement which allows for wages above minimum wage. The basic premise is that all workers should work in the regular labour market ?according to capacities? and that wage and wage support should be adapted to these capacities. Sheltered employment should be confined to the group of workers with less than 20% (ascribed) productivity for regular work. The strategy consists of the transfer of the responsibility to organize sheltered work to municipalities and to stimulate regular labour market participation, independent judgment of eligibility for WSW, experimental incentives to increase involvement of regular employers (see also: pilots work according to ability) and increased participation of workers in decision-making. Overall, the reform aims to stimulate the sheltered work companies (i.e., the companies offering the WSW population sheltered unemployment or (supported) regular employment; see below Q24) to focus more on integration of their workers in the regular labour market. With the expected new participation law in 2015, only the most severely handicapped will keep their special WSW-status.
Nature of the innovation-long-term perspective
Structural change with respect to policies for severly handicapped workers and sheltered employment
Type of innovation
- new policy, practice or measure
- new/changed output and/or outcome
- governance (Municipalities have received the budgets for implementation of the WSW, the Centre for Work and Income (now: UWV) implements the test on eligibility, a personal budget for workers to support finding (adapted) work, regulation of client participation)
- job guidance, coaching and/or counselling (Increase in supported employment and secondment require additional guidance/counselling)
- subsidies/tax-credits (Experimental wage dispensation for employers has been introduced to allow employers to pay below the minimum wage when workers are not 100% productive)
Clarification of intended mechanisms, outputs and outcomes (optional)
Changes took place in 2005 and 2008. In 2005 the responsibility for the WSW eligibility test was transferred to the centre for work and income (CWI, now: UWV). In 2008 the budget for WSW was decentralized to the municipalities, aimed to increase involvement of the municipalities in the implementation of the act (before municipalities were hardly involved). Also, client participation and personal budgets were introduced. In preparation for a new overall law (participation law) experiments were started to increase employer involvement and to stimulate the sheltered work companies to focus more on regular work (see: pilots Working according to Ability)
Intended target group
Disabled workers (severe cognitive or physical handicaps) with a sheltered-employment act status
Working age population
- educational level (low/medium/high) (Low)
- employment situation (WSW-workers work either in sheltered employment companies or with regular employers, based on a regular contract with supported employment facilities or secondment agreements)
- income level (low/medium/high) (Low)
- main source of income: paid work
- main source of income: social protection (Workers with a WSW-status receive a subsidized wage according to a special collective agreement )
Employers-private institutional actors
The sheltered work companies are the main target of this innovation, because they implement the actual law
Actors involved in policy-making/implementation and/or evaluation
- agency or national social insurance body (Responsible for the eligibility test for WSW)
- beneficiaries/users (The act regulates participation of users in policy making. Users may also use personal budgets to support re-integration into regular work)
- central state (Regulation)
- municipal government (Responsible for implementation and financing of sheltered work companies)
- private not-for-profit organisations (e.g. Third Sector organisation or NGO) (Sheltered work companies may be private not-for profit companies)
Clarification of the role of various actors
The sheltered work companies are both providers of sheltered work as well as intermediaries with the regular labour market. They provide labour intensive, simple production work and are supposed to partially earn their own budget in the market. They employ most of the workers under the WSW and service regular employers who hire these workers, by offering supported employment or secondment. These WSW-companies generally are independent holdings/companies, but they may also be part of municipal organisations. As such, the reforms are especially directed at their way of operating.
- governance (Municipalities have received control over the implementation, the social insurance company UWV implements the test on eligibility, a personal budget for workers to support finding (adapted) work has been introduced as well as client participation)
Did the innovation have any outcome related to job quantity?
Since 2003 the percentage of workers with a WSW-status who work in sheltered employment has dropped by 14%, whilst the rate of workers working with regular employers has risen. However: from 2007-2012 these rates have remained stable, indicating a lack of further progress since the 2008 reforms. The percentage of wsw-claimants that have been judged to be able to work in supported employment stands at around 50%, suggesting there is still a large group of workers capable of working with regular employers.
Intended and unintended outcomes
The percentage of WSW-workers independent of sheltered employment has risen by around 14% since 2003.
Clarification of outcomes in terms of impacting resilience and labour market inclusion
The evaluations observe that the reforms have resulted in a greater focus of sheltered work companies and municipalities on stimulating regular work for workers under the WSW-act. Also, networks with employers have been developed. The personal budgets are used by a small group of workers. The outcomes in terms of outflow to regular labour participation however fall short of expectations and have not developed further since 2008, which may be related to the crisis. Involvement of regular employers results hard to realize, given prejudices and complex regulations that scare-off employers. It is unclear whether the transfer of responsibilities to the municipalities in 2008 has influenced the lack of further progress. The evaluation observes that municipalities have formulated new policies, but the implementation lags behind. Sheltered work companies already changed their policies before municipalities received control. Possibly this relates to the fact that municipalities have acquired greater responsibilities in many social policy domains in combination with budget cuts. This has increased their workload and span of control, which may have delayed implementation. Furthermore, the further development of legislation has been delayed because of government changes, resulting in insecurity about future legislation.