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The Netherlands is in northwestern Europe, also known as Holland. It is bounded by the North Sea to the north and west, Germany to the east, and Belgium to the south. The capital is Amsterdam and the seat of government is The Hague. The official language is Dutch.
The economy of the Netherlands is the 17th largest in the world and one of the highest-earning nations. The Netherlands is one of the world’s 10 leading exporters. The food industry is one of the largest industries in the country, while other important industries include energy, chemicals, trade, machinery, metallurgy, electrical goods and services, and tourism.
Dutch Labor Code states that there are three main types of contracts:
For fixed-term employment contracts lasting no longer than two years, the maximum probationary period available is one month. With a permanent employment agreement or a fixed-term contract lasting beyond this two-year boundary, the maximum length for a probation period can reach two months.
The legal maximum trial period is two months, with no possibility of extension. Exceptions can only be made when a Collective Labor Agreement applies. The trial period is two months.
An employee must receive a permanent contract after 3 consecutive temporary contracts or after 3 years of temporary contracts.
A standard Dutch working week is 38 hours. The majority of fulltime jobs in the Netherlands are between 36-40 hours
a week, or seven to eight hours a day, five days a week.
Some companies have a 40-hour working week instead of the standard 38 hours, in which case employees receive more salary for more hours worked.
Another way employers may compensate higher weekly hours is by increasing annual holiday leave
(sometimes to around 12 additional days).
Part-time work is very common in the Netherlands. It means working more than 12 hours per week but less than 36, something which is highly requested among young parents for easier work-life balance.
If a shift is longer than 5,5 hours then employee has the right to a 30-minute (unpaid) break, which can be split into two breaks of 15 minutes.
It is mandatory for every employer in the Netherlands to pay additional sum of money, on top of their gross salary. This sum is translated as “Holiday/Vacation Money/13th wage”, as it is almost the equivalent to an extra month salary.
Working overtime is not so common in the Netherlands and there is no specific Dutch legislation on compensation for it, however maximum working hours for a given employee is set at 60 hours. A shift can be no more than 12 hours long, and an employee needs to get at least 11 hours off between shifts.
Whether overtime is compensated, employer should follow agreement from the employment contract, internal act or a collective labour agreement where overtime compensation is specified.
Over the course of four weeks, an employee’s average weekly hours should be lower than 55, unless a mutual agreement between the employee and employer is reached to work more. However, the hours cannot exceed 60.
The Netherlands does not have laws that regulate overtime pay, so the rate depends on the contact between an employee and employer. Employees are only paid for overtime work that has been requested by the employer.
Full-time employees are entitled to at least 20 days of holiday. Holiday allowance is 8% of the gross salary and is usually paid in May, based on the wage from June the previous year. The employer must maintain the employee’s salary while they are away on holiday. The maximum amount of holiday leave that an employee can take varies from employer to employer and is often specified in a company policy or union agreements.
Holiday allowance must be at least 8% of the employee’s gross wage of the previous year. This includes overtime, performance premiums, any commissions, supplements for working unsocial hours and payment in lieu of holiday days.
Holiday allowance is not due over expenses, bonuses, or profit distribution.
Employees are entitled to statutory leave: a minimum of 4 times the number of hours they work per week. The amount of statutory leave is calculated proportionally for employees that work part-time.
All residents in Netherlands are required to purchase statutory health insurance from private insurers, which are required to accept all applicants. In the Netherlands, there is no obligation for the employer to provide for a healthcare insurance policy. Examples include worker’s compensation insurance, unemployment insurance and, under some state and local laws, paid sick leave.
Under Dutch employment law, an employee is entitled to sick pay for the first two years of illness which prevents them from working. This sick pay must be, at a minimum, 70% of the employee’s current wages.
However, if this 70% falls below the statutory minimum wage, then the sick pay entitlement will rise until this requirement is met. If an employee falls sick due to complications in the pregnancy, she will be entitled to 100% of the salary whilst on sick leave.
If an employee falls sick during your holiday, there is a possibility for the period in which the employee is sick to be logged as sick leave instead of holiday leave. This will be paid, and the employee’s holiday entitlement will be restored for use at a later date. If the employee returns to work on a partial basis, then the sick pay entitlement may be reduced in line with the number of hours the employee attends work.
According to the Dutch maternity leave law, the mother is entitled to 16 weeks of leave and 20 weeks in case of multiple births. If the baby is born before the due date, the mother starts her 16 weeks leave a day after birth. The same applies if the mother gives birth after her due date.
Pregnant employees are entitled to 6 weeks pregnancy leave (before the due date) and at least 10 weeks maternity leave (after childbirth). In total your employee has a right to at least 16 weeks of leave. If, for instance, the baby is born before the pregnancy leave, the total of 16 weeks starts from the day after the birth.
In some cases, the maternity leave can be longer than 10 weeks. For example:
If the employee takes less than 6 weeks (but no less than 4 weeks) pregnancy leave before the birth. She can add the remaining amount to her maternity leave after the birth.
If the baby is born later than the due date. The employee’s maternity leave begins after the actual birth. The total may therefore be longer than 16 weeks.
In the case of a multiple birth, your employee has the right to at least 20 weeks leave.
Mothers are entitled to 100% of the salary during the leave period (paid by The Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV).
Fathers and partners are entitled to one week of paid paternity leave, which can be taken any time in the first 4 weeks after the birth of the child, and five additional weeks of partially paid leave (during which they receive a benefit of 70% of their wage). Part-time workers are entitled to one working week of paternity leave.
Transport costs – companies are not obligated to cover the cost of travelling to work, but can provide a public transport subscription as an additional benefit to the employee.
Relocation costs – in case an employee needs to move due to company’s request, the employer can take over all the moving costs.
Bike purchase – the National Bicycle Plan lets employers purchase a bike every three years.
13th salary — is also known as the year-end bonus because it’s typically paid at the end of the year. It’s taxed differently than normal salary, so the net amount may be different from a normal monthly salary.
Education benefit – employer can cover an additional course or training to extend employee’s skills.
Flexibility benefit – it can be clarified in the employment contract how many days per week can an employee work from home.
Free meal – Dutch employers may offer free lunch for their employees.
Health and fitness benefit – employers can ensure a discount on employee’s health insurance (which is mandatory), a free or discounted fitness membership.
A company phone, tablet, or laptop – provided by an employer.
Unlimited or additional vacation days –vacation leave can be stated in collective agreement or employment contract.
Day-care for children
Pension schemes.
All residents in Netherlands are required to purchase statutory health insurance from private insurers, which are required to accept all applicants. In the Netherlands, there is no obligation for the employer to provide a healthcare insurance policy. There are two Dutch Social Security Systems.
National insurance – this system is compulsory. Funded from the contributions paid by employees.
Employee Insurance — it is compulsory for anyone employed in the Netherlands to be insured under the Dutch Employee Insurance Schemes.
EEA and Swiss residents do not need a work permit to work in the Netherlands. They do need a valid passport or identity document. If a person is not national of one of the countries of EEA or Switzerland, then person may need a short-stay Schengen visa. This allows to stay in the Schengen area for a maximum of 90 days within a 180-day period.
If work is estimated for a longer time, than a person will need a residence permit. There are various residence permits for working in the Netherlands, which depends on the job performed (highly skilled migrant, EU blue card, researchers, trainee’s, employee working in art and culture, employee working an international non-profit organization etc.).
Highly skilled migrants do not require an employment permit.
The employer can appeal to the following statutory dismissal grounds under Dutch law:
Economic grounds
Long-term illness or disability
Regularly not being able to perform work due to illness or disability
Underperformance
Culpable acts or omissions
Conscientious objection
Disturbed working relationship
Other grounds.
Collective dismissal
If an employer decides to lay off 20 or more workers within three months, he must inform and consult the competent trade unions and inform the Employee’s Insurance Institute. If the employer fails to fulfill its obligations for the adequate dismissal by this Act, he must annul the termination of the employment contract.
Notice period
The statutory notice period is 1 month. However, a longer or shorter notice period with the employee can be agreed and explicitly stated in the contract of employment. If the employee’s notice period is more than 1 month, the employer’s notice period has to be at least twice as long. The maximum notice period for an employee is 6 months.
Resignation by employee: The statutory-notice period for the employee is one month, regardless of the number of years of employment.
Dismissal by employer: The statutory-notice period for the employer depends on the length of service as per the termination date. An applicable collective agreement may stipulate otherwise, but the statutory-notice period is equal to:
One month — if the employment has lasted 5 years or less;
Two months — if the employment has lasted between 5 and 10;
Three months — if the employment has lasted between 10 and 15 years;
Four months — if the employment has lasted for 15 years or longer.
In Netherlands, the calculation of the severance payment is based on the years of service.
This severance pay is a 1/3 of the gross monthly salary for every year of service plus a proportionate part thereof in the event of incomplete years of service.
It’s currently capped at €89,000 gross or the employee’s full year’s salary, whichever is higher.
If the parties reach an agreement to terminate the employment contract amicably, the employee is not entitled to severance pay.
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