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Global HR Compliance in the Netherlands

Hiring in the Netherlands requires strict adherence to a detailed framework of employment law, tax regulation, and employee protection standards. Whether you are onboarding a single professional or managing a post-acquisition workforce transition, foreign employers must understand the legal environment that governs employment relationships — from employment contract type to dismissal procedures.

This guide outlines the key compliance obligations for hiring and managing employees in the Netherlands and explains how Acumen International enables lawful, low-risk workforce engagement without the need for a local entity.

Employment Contracts in the Netherlands

All employment relationships in the Netherlands must be formalised in a written employment contract. Contracts may be:

  • Indefinite-term (permanent)
  • Fixed-term (temporary) — subject to strict limitations under the chain of contracts rule

A series of fixed-term contracts must convert to a permanent contract if:

  • The total duration exceeds 36 months, or
  • More than three consecutive contracts are issued without a break of at least six months

Contracts must specify working hours, salary, probation (if any), and applicable collective labour agreement (if relevant). Written agreements are required for probation clauses, confidentiality, and non-compete terms.

Collective Labour Agreements (CLAs)

A majority of employees in the Netherlands are covered by sector-level CLAs, which supplement or override statutory rules on:

  • Minimum salaries
  • Leave entitlements
  • Pension obligations
  • Termination procedures
  • Probationary periods and working hours

Some employers negotiate their own CLAs at company level. In either case, CLAs are legally binding where applicable and must be incorporated into the employment arrangement.

Probation Periods

Probation clauses must be agreed in writing. Limits are as follows:

  • Permanent contracts: maximum of 2 months
  • Fixed-term contracts over 6 months: maximum of 1 month
  • Fixed-term contracts longer than 2 years: up to 2 months.

No probation is permitted for contracts of 6 months or less, unless a CLA provides otherwise.

Working Hours and Overtime

  • Standard full-time working week: 36–40 hours
  • Legal maximum: 12 hours/day and 60 hours/week, subject to average limits over reference periods
  • Overtime: Regulated by contract or CLA; not always compensated unless required
  • Employees must receive 11 consecutive hours of rest after each working day.

Leave Entitlements

Annual Leave

Employees are entitled to 20 statutory paid leave days per year (based on a 5-day working week). Additional non-statutory leave is often provided by contract or CLA. Statutory leave must be used within 6 months of the following calendar year.

Sick Leave

Employers must continue paying salary for up to 104 weeks (2 years) during illness:

  • Year 1: at least 70% of last earned salary (cannot fall below statutory minimum wage)
  • Year 2: In the second year of illness (weeks 53–104), the employer must continue paying at least 70% of salary, with no minimum wage floor. Salary is only owed up to the statutory maximum daily wage.
  • Top-ups may be required by CLA.

Parental and Maternity Leave

  • Maternity leave: 16 weeks (paid via UWV up to a capped daily wage)
  • Paternity leave: 1 week at full pay, plus up to 5 additional weeks paid at 70% (funded by UWV)
  • Parental leave: up to 26 times the employee’s weekly working hours; 9 weeks partially paid.

Termination Rules and Severance

Valid Grounds for Dismissal

Dismissals must follow one of two authorised procedures:

  1. Via the UWV (Employee Insurance Agency) – for:
    • Economic/business reasons
    • Long-term illness (beyond 2 years)
  2. Via the Court – for:

Prohibited Dismissals

Employees in protected categories (e.g. on maternity leave or within the first two years of illness) are subject to dismissal restrictions. Termination is only permitted with prior court approval and under strict conditions.

Dismissal is prohibited during:

  • Pregnancy or maternity leave
  • The first 2 years of illness
  • Works council membership
  • Parental leave
  • Trade union activity

Dismissals may be challenged in court if employees believe the termination was discriminatory, procedurally flawed, or lacked proper authorisation.

Notice Periods

Minimum notice for employers:

  • 1 month: service < 5 years
  • 2 months: 5–10 years
  • 3 months: 10–15 years
  • 4 months: 15+ years

Employees owe 1 month’s notice, unless contractually extended. Employer notice may be shortened by time spent in the UWV process.

Severance and Transition Payment

All employees dismissed by the employer (except for gross misconduct) are entitled to a transition payment:

  • 1/3 of one month’s gross salary per full year of service
  • Calculated from day one of employment
  • Pay in lieu of notice may also apply.

Employee Benefits and Contributions

Standard entitlements include:

  • Minimum wage (as of July 2025): The statutory minimum wage in the Netherlands is based on an hourly rate, which is €14.40 per hour for full-time workers aged 21 and over. This rate applies regardless of the number of hours in a standard full-time week (e.g., 36, 38, or 40 hours), as the fixed monthly minimum wage was abolished in January 2024.
  • 8% holiday allowance
  • Pension (mandatory in many sectors via CLA)
  • Insurance coverage: unemployment, disability, and health
  • Fringe benefits: lease car, bonus, 13th-month salary (sector- or contract-specific)

All employer and employee contributions are reported via the payroll system and remitted monthly.

Immigration and Work Permits

EU/EEA nationals do not require a permit. For third-country nationals, employers must:

  • Act as a recognised sponsor (or use one)
  • Apply for a work and residence permit (GVVA)
  • Justify labour market need (unless under fast-track or ICT schemes)

Acumen International supports the full immigration process as part of its EOR model, ensuring legal work status and correct employment classification from day one.

Acumen International: Employer of Record (EOR) in the Netherlands

Hiring in the Netherlands without a local entity is legally possible—but only with the correct employment structure and full regulatory compliance. As a trusted Employer of Record, Acumen International enables foreign companies to hire Dutch employees legally, pay them compliantly, and avoid local incorporation.

Our Service Scope

  • Drafting compliant employment contracts
  • Registering employees with tax and social bodies
  • Administering payroll, tax filings, and social contributions
  • Managing holiday, leave, sick pay, and terminations
  • Supporting pension enrolment and benefits administration

Employer Responsibilities We Take On

  • Acting as the legal employer in the Netherlands
  • Assuming full liability for local employment compliance
  • Monitoring risk factors like CLA applicability, dismissal law, and tribunal exposure
  • Ensuring accurate severance calculations and proper exit procedures

Immigration Support (if needed)

  • Sponsorship of non-EU workers
  • End-to-end permit processing (GVVA and related categories)
  • Coordination of relocation, local registration, and housing declarations

Risk and Compliance Management

We help clients avoid:

Use Cases

  • Fast onboarding of Dutch professionals without local incorporation
  • Transitioning freelancers or contractors to employees
  • Supporting R&D, commercial, or operations teams locally
  • Retaining employees post-acquisition
  • Hiring non-EU talent through sponsored employment
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