Netherlands - Employee Benefits & Compensation (2024)

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Expected policies are positive for many employees butemployers will need to adapt to new regulations and costincreases

The newly formed Dutch cabinet, – a coalition of the Partyfor Freedom (PVV), the People's Party for Freedom and Democracy(VVD), the New Social Contract (NSC) party and the Farmer CitizenMovement (BBB) – that will be presented on 2 July now facesthe challenge of further developing and implementing an outlineagreement that will likely include a range of employment andlabour-related reforms.

The potential changes and policies that the PVV, VVD, NSC andBBB governing coalition, which is led by the Netherlands' newprime minister, Dick Schoof, is likely to pursue are set to have asignificant impact on both employers and employees in theNetherlands.

Livelihood security and purchasing power

One of the core goals of the new cabinet is improving thelivelihood security and purchasing power of citizens. This will beachieved through measures such as reducing labour taxes andlowering the marginal tax rate. For example, by introducing anadditional bracket in the income tax, workers can retain more oftheir income. For employees, this means a direct improvement intheir purchasing power, potentially leading to increased spendingcapacity and financial security.

Job market security

The cabinet aims for more security in the job market, especiallyfor self-employed individuals, known as ZZP'ers, and temporaryworkers. The continuation of the Assessment of EmploymentRelationships and Legal Presumption (Clarification) Act (VBAR) andthe Provision of Personnel (Accreditation) Act (WTTA) could resultin more permanent contracts for employees and clear regulations forZZP'ers.

For employees, this means more stability and security in theiremployment relationships. However, employers may face stricterregulations regarding flexible contracts and hiring self-employedworkers, which could lead to higher costs and a need to adjuststaffing strategies.

Childcare and social security

The reform of the childcare system will continue, makingchildcare almost free for working parents and shiftingresponsibility to institutions. This could significantly ease thefinancial burden on working parents, giving them more freedom towork. Additionally, steps are being taken to improve socialsecurity, tax schemes, and benefits to make work more rewarding.This could lead to a revision of the benefits and tax system, withboth positive and negative financial implications for differenthouseholds.

Unemployment Insurance reform

An important measure in the outline agreement is the reform ofthe Unemployment Insurance (WW). The exact implementation is partof the outline agreement's development. It could involve anextended notice period for employment contracts combined with agatekeeper assessment for WW at the Employee Insurance Agency and areduction of the WW duration to 18 months. This could encourageemployees to seek new jobs faster but may also bring financialuncertainty for those who are long-term unemployed.

Transition compensation and AWF premium

Compensation for transition fees upon dismissal due to long-termdisability (after the two-year salary payment obligation) will belimited to small employers (fewer than 25 employees). Employerswith 25 or more employees will no longer be compensated.

The premium for the General Unemployment Fund (AWF) for bothpermanent and flexible contracts will be increased by 0.1percentage points from 2026. This rise in the AWF premium willresult in higher costs for employers.

Control of asylum and migration

The new cabinet aims to limit labour migration, implementingrecommendations from the Taskforce for Protecting Labor Migrantsand regulating the temporary employment sector through the WTTAadmission system. Additional checks will be placed on labourmigrants from outside the EU.

For long-term stays, employers will also be responsible forthese workers learning the Dutch language. The qualificationrequirements for the highly skilled migrants scheme will betightened and raised, and the 30% ruling will be furtherscrutinized.

Employers reliant on labour migrants will need to considerstricter regulations and higher costs for integrating theseworkers, potentially creating challenges in attracting andretaining labour migrants.

Whistleblower protection

Whistleblower protection will be strengthened, which is apositive step for transparency and integrity within organisations.However, this may also mean that employers need to review andenhance their internal procedures and reporting systems to complywith new requirements.

Osborne Clarke comment

The new cabinet intends to implement a series of measures thatcould have both positive and negative consequences for employersand employees in the Netherlands. Stimulating purchasing power, jobmarket security, and social security reform are steps in the rightdirection for many employees. At the same time, employers will needto adapt to new regulations and increased costs.

It remains to be seen what specific measures will be taken andhow these will be implemented. We will keep you informed of furtherdevelopments to be prepared for the upcoming changes.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circ*mstances.