Has the time come to expand your employee search into the Netherlands? With an ever-growing base of highly qualified tech talent, it’s a country that global employers are turning their attention toward.
However, there’s a lot to know before you hire and onboard an employee in the Netherlands. The knowledge you collect will help prevent compliance-related setbacks that can cost your company time and money.
EORs in the Netherlands
Through the use of an employer of record, you can tap into the Netherlands' diverse talent pool without the typical headaches of global employment.
Alternatively, a global employment platform like Oyster can manage all aspects of employment on your behalf to ensure you comply with local employment laws. This includes:
- Onboarding new employees
- Payroll processing and taxes
- Creating and implementing benefits packages
- Managing time off
- Offboarding employees who are leaving the organization
With a full-service solution, hiring and managing employees in the Netherlands has never been easier.
A few things to know about hiring in the Netherlands
1. Vacation payment
Unique to the Netherlands, there’s a vacation payment of approximately 8% in addition to an employee’s gross salary. It’s paid out annually in May.
However, this vacation payment is not required if the employee earns more than three times the country’s minimum wage.
2. Employer pension plan
As of January 2021, all companies employing workers in the Netherlands are required to provide an employer pension plan. Pension schemes are typically flat rates tied to the worker’s wages. Both employers and employees also pay into the social insurance system.
Neglecting to plan for pension contributions can result in financial penalties per affected employee.
3. Working hours
In the Netherlands, standard working hours are typically between 36 and 40 hours per week. Employees are not permitted to work more than 55 hours per week over a four-week work period. Additionally, they are not permitted to work more than 48 hours per week over a 16-week period.
Most workers in the Netherlands never work overtime, but if you anticipate there being a need for them to do so, your contract should outline the applicable compensation.
4. National public holidays
- New Year’s Day
- Good Friday
- Easter Sunday
- Easter Monday
- King’s Day
- Liberation Day
- Ascension Day
- Whit Sunday
- Whit Monday
- Christmas Day
- Boxing Day
Several of these holidays are unique to the country. Since they’re national public holidays, your Netherlands-based employees have the legal right to take the day off.
There are specific laws associated with terminating and offboarding an employee in the Netherlands based on their tenure:
- Less than five years of employment requires a notice period of one month
- Five to 10 years of employment requires a notice period of two months
- 10 to 15 years of employment requires a notice period of three months
- 15+ years of service requires a notice period of four months
If an employee is being terminated due to reasons outside of gross misconduct or legal concerns, the employer will need permission from the Public Employment Service. The employee will need to consent to the termination and has 14 days for their consent to be finalized. If the employee withdraws their consent, both parties will need to renegotiate.
A terminated employee who worked for two years or longer will be entitled to a transition allowance that equates to a third of their monthly wage per year of employment up to 10 years.
Things to consider before hiring in the Netherlands
Now that you understand the regulations and conditions that apply to the Netherlands’ sizable talent pool, here are some additional questions to consider before hiring:
- Are you comfortable with the typical payroll frequency of once per month?
- What process will you use to pay your employees in euros?
- Are you familiar with employer taxes and their impact on payroll management?
- Did you know that new expats may be eligible for a 30% tax break that can last as long as five years?
Answering these questions will help you develop a recruitment strategy that makes your company attractive to workers in the Netherlands and complies with the country’s labor laws.
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expenses.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.