Labour and employment law in the Netherlands

Introduction

Dutch employment law is elaborate and relatively complex. It is divided into individual and collective law and is closely related to social security law. The following text will report the latest developments in Dutch employment law.

Key Points

• Employment law is not consolidated into a single code.
• Employees have a strong legal position.
• Preventive dismissal assessment.
• Relatively lengthy period of salary payment during illness.
• New Dutch employment law as from 1 January 2020: the Balanced Labour Market Act.

Legal framework

Dutch employment law is not consolidated into a single code. The employment relationship under Dutch law is governed by the compulsory statutory regulations laid down in (for example) the Dutch Civil Code. The relationship can furthermore be governed by (among other things) the conditions laid down in a Collective Labour Agreement (if applicable), internal regulations (if applicable) and the individual employment contract. Judicial precedent is an important part of the legal framework because many employment matters are influenced by case law.

New Developments

Independent workers versus employees

A critical issue in Dutch labour law is the distinction between when an individual is regarded as an independent worker versus an employee. This classification has significant implications for employment rights, tax obligations, and social security contributions. Hereinafter, the latest case law, the pending legislative proposal for the Clarification of Assessment of Employment Relations and Legal Presumption Act, and the termination of the enforcement moratorium by the Tax Authority, which has been in force since 1 January 2025.

Deliveroo-case

On March 24, 2023, the Supreme Court ruled in the Deliveroo case that Deliveroo couriers are employees and established additional criteria to determine whether an agreement is an employment contract. The most important aspect is that the Supreme Court places more emphasis on whether the worker behaves as an entrepreneur, for example by having the freedom to commit to multiple (possibly competing) clients. Some of the key factors based on the Deliveroo case are:

• the nature and duration of the work performed;
• the manner in which the work and working hours are determined;
• the level of integration of the worker and their work into the organisation and business operations of the employer;
• the existence of an obligation to personally perform the work;
• the method used to establish and pay the compensation for the work performed;
• the level of compensation paid to the worker;
• whether the worker bears any commercial risk in performing the work; and
• whether the worker behaves, or can behave, like an entrepreneur in the economic traffic.

Legislative Proposal Clarification of Assessment of Employment Relations and Legal Presumption Act postponed

On October 6, 2023, the initial legislative proposal Clarification of Assessment of Employment Relations and Legal Presumption Act (abbreviated as VBAR) was submitted. The aim of this legislation is to clarify employment relationships, ensuring a clear distinction between independent workers and employees. The proposal introduces a legal assessment framework based on recent case law like the Deliveroo case. In addition, a so-called legal presumption is introduced on the basis of which workers with an hourly wage of less than EUR 33 will be considered to be performing their work on the basis of an employment contract. In February 2024, Minister van Gennip announced that the implementation of the act would be postponed until 2026 to allow for further review and adjustments.

However, as of 23 February 2026 a new government is in place. This government has decided that the legislative proposal VBAR caused too much unrest. Therefore, the government plans to implement a new bill: the so-called Self-Employed Persons Act (in Dutch: Zelfstandigenwet). This bill contains amended sections of the VBAR. The clarification of the relationship of authority will be dropped. The new bill takes entrepreneurship as its starting point rather than the existence of an employment contract. However, the government does wish to give self-employed workers a stronger legal position through the previously proposed hourly rate of up to EUR 38. It is not yet known when this Act will come into force.

Tax Authority to Enforce Regulations Against Misclassification as Independent Worker from 2025

As of 1 January 2025, the Tax Authority has actively enforced regulations to address the misclassification of workers as independent workers. When the Tax Authority determines that an independent worker qualifies as an employee rather than an independent worker, and therefore an employment contract is applicable, they may impose additional tax assessments and penalties. Consequently, it is crucial to pay close attention to this issue and prepare a comprehensive overview of how independent workers are utilized within your organisation.

Whistleblowers act

As of 17 December 2023, employers in the private sector with 50–249 employees are required to update their internal whistleblowing procedures to comply with the Whistleblower Protection Act. This update includes, among other things, revising the types of misconduct that can be reported, the methods for reporting, and the deadlines for acknowledgment of receipt and status updates. In the original legislative proposal for the implementation of the directive, a provision was included allowing the Whistleblowers Authority to impose sanctions (administrative fines) in relation to the employer’s internal reporting procedure, failure to follow the recommendations of the Whistleblowers Authority’s investigation department and the employer’s conduct towards the employee following a report of suspected wrongdoing. However, this part of the proposal has not yet entered into force. This sanction option is now being further reviewed and will be included in a new legislative proposal, which is expected to be presented in the first half of 2025. Until then, the Whistleblowers Authority will not be able to impose sanctions for the fact that the internal reporting procedure does not fully comply with the formal legal requirements.

30% ruling

The Dutch 30% ruling is for expatriates who earn more than EUR 48,013 per year. Subject to certain conditions, they can receive a tax-free allowance for a period of maximum 5 years. The maximum amount of allowance is EUR 262,000 per year. In 2025 and 2026, the tax-free allowance will remain at a maximum of 30%. From 2027, this will be reduced to a maximum of 27%. In addition, from 2027 a higher salary threshold will apply.

CO2 reduction

On July 1, 2024, the decision on CO2 reduction for business-related passenger mobility came into effect. Since then, organisations are required to report their CO2 emissions related to business travel and employees’ commuting to the Netherlands Enterprise Agency.

Inappropriate behaviour in the workplace

The issue of inappropriate behaviour in the workplace is receiving increasing attention. On 13 March 2024, Government Commissioner Mariëtte Hamer released the “Guide on Workplace Culture Change” for organisations addressing sexual misconduct in the workplace. This guide is a follow-up to the earlier prototype from 2023, the “Guide on Sexual Misconduct”. Additionally, the Modernization of the Sexual Offenses Act was enacted and came into effect on July 1, 2024. This act is based on consent and free will. Involuntary, unequal, or unwanted sexual contact is a punishable offense, regardless of whether there is coercion.

Outline agreement

On January 30, 2026, the coalition-forming political parties presented the key priorities for the new cabinet. The following topics are particularly relevant for the labour market:

• The government intends to introduce the Self-Employment Act. This Act will introduce a new assessment framework to determine objectively whether a situation of (bogus) self-employment exists. This should make it easier to classify the employment relationship. The government has indicated that it wishes to make continued payment of wages during sick leave more workable. There will be an easing of the reintegration obligations for small and medium-sized employers in the second year of sickness.
• The advice of the company doctor will be decisive in determining whether an employer has made sufficient efforts to facilitate the employee’s reintegration.
• Furthermore, there will be changes in social security entitlements. The duration of the unemployment benefit will be shortened and the state pension age will possibly be raised.
• Lastly, the government intends to scale back the compensation scheme for transition payments in cases of long-term illness.

Legislative proposal Act to Improve Security for Flexible Workers (in Dutch: “Wet meer zekerheid flexwerkers”)

In April 2023, the government introduced a labour market package. The initial legislative proposal from this package, which encompasses a set of measures aimed at enhancing job security for employees, has been presented. The following points are addressed within this proposal.

• Zero-hour contracts will be abolished.
• The break period for the chain arrangement will be extended from 6 to 60 months.
• The provision allowing deviations from the collective labour agreement (Article 7:668a, paragraph 5) will be abolished.
• For temporary employment agreements, there will be a limitation on the phase system and a tightening of the provisions under the Working Conditions (Flexibility and Security) Act (Waadi).