Netherlands
Re-employment guarantee (case law)
Impact date: 15 April 2025 The Court of Appeal in The Hague recently ruled on the interpretation of a re-employment guarantee included in a social plan agreed with a trade union. Pursuant to the social plan, the employer must include within a settlement agreement that an employee would be entitled to be re-employed if the employer was to open a vacancy for a position similar to the employee’s former position or activities within 26 weeks after termination of their employment. This provision is similar to the re-employment provision included in Dutch law which provides for a similar guarantee if the employment contract is terminated with permission of the UWV. In this case, an employee asserted entitlement to a re-opened position under this guarantee. The employer, however, opted to fill the vacancy internally and rejected the employee’s claim. The Court of Appeal ruled that the re-employment provision of the social plan applied only in cases where the vacancy is externally advertised.
Employer implications/action needed Employers to note that it can be argued that the re-employment guarantee is limited to positions that are externally advertised and does not apply to internal advertising.
Employer risk N/A
Increase of statutory minimum wage
Impact date: 1 July 2025 The minimum wage for employees aged 21 and over will be increased from €14.06 gross to €14.40 per hour, excluding the 8% statutory holiday allowance.
Employer implications/action needed Employers should ensure that their employees receive at least the statutory minimum wage and check whether salary levels required for certain exceptions (e.g. including holiday allowance in salary if salary equals 3x minimum wage) are still being met.
Employer risk Failing to pay the statutory minimum wage may result in wage claims from employees (including the statutory increase of 50%) and fines from the Labour Authority between €500 and €10,000 per employee. Additionally, this may have a negative effect on an employer’s reputation.
Pay Transparency Directive
Impact date: 6 June 2026 The Dutch Government is currently working on new legislation to transpose the EU Pay Transparency Directive. The draft version of the legislation was published for consultation on 26 March 2025.
In summary, the draft legislation introduces the following obligations for employers:
- Employers should have wage structures in place which are based on objective and gender-neutral criteria
- Job applicants have the right to request and receive information from their (potential) future employer about the starting wage or its range. Employers are prohibited from asking applicants about their previous salary
- Employers should provide their employees with easy access to the criteria used to determine remuneration. Employers with 50 or more employees must also provide access to the criteria used for wage development
- Employees have the right to receive written information about their wage level and average wage level by gender for equal work
- Employers with 250+ employees should report annually on the wage gap. Employers with 100 to 249 employees should report every three years. Employers with less than 100 employees are not required to report
- If the wage report reveals an unjustified difference of at least 5% in the average wage of female and male employees performing equal (or equivalent) work, and this difference is not rectified within six months of submitting the report, employers are required to conduct a wage evaluation together with employee representatives
- Employers should determine what is meant by ‘equal employment’ based on objective and gender-neutral criteria: skills, efforts, responsibilities and working conditions of employees
The Dutch Government intends to give the Works Council or Trade Unions (if involved) an important role in this process (including information and consent rights).
Employer implications/action needed If this proposed legislation is adopted, employers should ensure that they have an up to date wage structure in place which is based on objective and gender-neutral criteria, equal pay for equal work is promoted and, where necessary, justified. Employers should also report on the average pay differences within their organization as well as differences between different categories of employees performing equal work or work of equal value (provided that they meet the applicable thresholds).
Employer risk The specific penalties will be detailed in forthcoming subordinate regulations. In case of non-compliance with this new legislation, it is expected that employers risk individual court proceedings or proceedings at the Netherlands Institute for Human Rights. Additionally, the Labour Inspectorate may impose penalties.
Temporary agency workers
Impact date: 1 January 2027. Compliance will be enforced from 1 January 2028 On 15 April 2025, the Dutch Lower House of Parliament (Tweede Kamer) adopted the Provision of Personnel Admission Act (Wet toelating terbeschikkingstelling van arbeidskrachten, “Wtta”). The Wtta aims to improve the position of temporary agency workers and is designed to combat abuses within the temporary employment agency sector, addressing issues such as underpayment of wages, excessive working hours, illegal employment, non-payment of taxes, and labour exploitation and to create a level playing field for temporary agency companies that make temporary agency workers available to other companies.
The Wtta introduces a mandatory admission system for all temporary agency companies (and other companies) making temporary agency workers available under the Placement of Personnel by Intermediaries Act (Wet allocatie arbeidskrachten door intermediairs, “Waadi”). Under the new regime, the temporary agency companies must apply for admission. Once admitted, the company is permitted to provide temporary workers for a period of four years.
To obtain admission, temporary agency companies must satisfy several key requirements:
- Registration in the Dutch Trade Register
- Submission of a Certificate of Conduct (“VOG”) for legal entities, with a new VOG required upon any change in directors or other key personnel
- Payment of a financial security deposit of €100,000 to a designated administrator (starting temporary agency companies pay €50,000)
- Proof of compliance with a set of quality standards to be established under secondary legislation (i.e. correct payment of wages and taxes)
The Wtta also allows for an exemption procedure for companies that supply workers only on a very limited basis.
In addition, the Wtta strengthens the duty of care for hirers of temporary agency workers. Both end users and any intermediaries involved in re-hiring will be obliged to verify through a public register whether the temporary agency company is properly admitted. Failure to do so, and hiring through a non-admitted supplier, can result in (high) fines for all parties involved.
Employer implications/action needed As of 1 January 2027, temporary agency workers (or other companies that make temporary agency workers available) can start with the admission process. These companies must submit their applications before 1 July 2027. As of January 1, 2028, companies hiring temporary workers will be required to verify through the public register whether the staffing agencies they work with are authorized.
Employer risk In the event of a violation by either the temporary agency company or the hiring company, the Labour Inspectorate may impose an administrative fine of up to €90,000 per violation. The specific fine amounts will be further detailed in policy regulation. The Labour Inspectorate can also suspend or withdraw the authorization in the event of serious misconduct.
Legislative proposal to create more security for flexible employees
Impact date: 1 January 2027 (expected at this time) Proposals for a ‘More Security for Flexible Employees Act’ have been under consultation since 9 July 2023. Once in force, the proposed Act will largely replace on-call contracts with ‘bandwidth contracts’, which are a new type of contract for a fixed or indefinite term, stating a minimum number of hours with a maximum of 130% of the minimum, for which employees will be scheduled and paid. There will be no obligation for employees to work outside the agreed working hours. An on-call contract will only be permitted for students and temporary agency workers and only during the first 52 weeks of work.
The Act also proposes that the break between consecutive contracts that resets the maximum chain of fixed term employment agreements will be increased from six months to five years. This means that the last employment contract in the chain of contracts will be deemed an indefinite term contract if the aggregate duration is longer than three years, with breaks between contracts of five years or less included.
Employer implications/action needed If the legislative proposal is adopted, employers will need to replace all on-call contracts with bandwidth contracts (other than for students and seasonal workers) and employers are advised to keep records of fixed term employees for at least five years after the end of employment, to keep track of whether an employee can return on a temporary basis or only on the basis of an indefinite term employment contract.
Employer risk If the legislative proposal is adopted, employers will risk (wage) claims if the wrong contract is used. If employers do not take into account breaks between contracts of five years or less, they risk a fixed term contract converting to an indefinite term contract.
Compensation severance payment limited to small employers only
Impact date: Awaited (expected 1 July 2026) Currently, in the event of an employment contract being terminated due to long-term illness, all Dutch employers can request from the UWV (the Dutch Governmental body) a compensation payment equal to the statutory severance payment calculated until the day after the day on which the employee had been ill for 104 weeks.
Draft legislation has been published that limits this compensation to small employers only. Once this legislation has been adopted by the House of Representatives and the Senate, only employers who are classified as ‘small’ by the Tax Authority will remain eligible for this compensation.
Employer implications/action needed Once in force, employers who are not classified as ‘small’ by the Tax Authority will no longer be entitled to request compensation from the UWV where an employment contract is terminated due to long-term illness.
Non-competition clauses
Impact date: Awaited Draft legislation has been published which will significantly change the rules for using non-competition (and business relations) restrictions.
In summary, the changes include:
- Non-competition restrictions shall be limited in duration to maximum one year after termination of employment
- Non-competition clauses should include a geographical scope
- All employment contracts including a non-competition clause must state the justification to impose the restriction
- Employers shall invoke the non-competition clause at least one month before termination of the employment contract if they intend to enforce the clause
- Employers shall pay compensation equal to 50% of the most recently earned monthly salary for each month that the employee will be bound by the clause unless a higher compensation has been agreed
Employer implications/action needed Employers should continue to monitor the progress of the proposal. If it is adopted, employers will need to ensure that non-competition (and business relations) clauses concluded with employees are compliant with the new requirements.
Employer risk Once in force, in the event that non-competition (and business relations) clauses do not meet the new requirements, such restrictive covenants will be deemed invalid and will not be able to be invoked.
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