HUMAN

RESOURCES
IN THE
NETHERLANDS

FREQUENTLY ASKED QUESTIONS

INTRODUCTION TO THE BASICS

1
Table of
content
1. Hiring personnel, labour laws and terms of employment
1.1. Are there rules and regulations pertaining to the minimum wage?.............................3
1.2. What are the laws pertaining to holiday allowance?.....................................................3
1.3. Do I have to provide a pension scheme?......................................................................4
1.4. Must I adhere to special rules when hiring temporary personnel?...............................4
1.5. It is difficult to find specialised personnel. How can I connect with the right talent?......5
1.6. Do I have to follow a collective labour agreement (CAO)?...........................................5

2. Personnel administration
2.1. What actions are required when registering information in a personnel file?..............6

3. Dismissing personnel, labour laws

3.1. What steps should I follow when dismissing an employee?.........................................8

4. Sick leave
4.1. What are the rules pertaining to an employees illness and subsequent
absence from work?....................................................................................................11
4.2. Reintegration File........................................................................................................12
4.3. Penalties......................................................................................................................12

5. Works Council
5.1. What are the rules regarding staff representation or a Works Council??...................13

6. Setting up an effective HR structure

6.1. Can you advise me on setting up an strong HR structure in our company?...............14
6.2. Where can I find more information about HR-related issues?.....................................15

2
1.
Hiring personnel, labour
laws and terms of employment
1.1. Are there rules and regulations pertaining
to the minimum wage?

Every employee working in the Netherlands who is younger For more information
than 67 years of age is entitled to the Dutch minimum wage, (in Dutch only):
www.rijksoverheid.nl/onderwerpen/
even if they are a foreign national. There are specific minimum minimumloon/vraag-en-antwoord/
wage scales, starting from the age of 15 up to 23 years and hoe-hoog-is-het-minimumloon.html
older. As an employer, you may, of course, choose to pay more
but you cannot pay less. The gross minimum wage rates are
stipulated in the provisions of the Minimum Wage and Mini-
mum Holiday Allowance Act (Wet minimumloon en minimum-
vakantiebijslag). You are obliged to state the gross minimum
wage applicable on the employees payslip. Every year, on the
first day of January and the first day of July, the gross minimum
wage amounts are revised. The current gross minimum wage
can be found on the website of the Ministry of Social Affairs
(see link below).

1.2. What are the laws pertaining to holiday

allowance?

Employees are entitled to a minimum holiday allowance, as For more information

outlined in the Minimum Wage and Minimum Holiday Allow- (in Dutch only):
www.rijksoverheid.nl/ministeries/szw
ance Act (Wet minimumloon en minimumvakantiebijslag). This
is calculated to be a minimum of 8 per cent of the employees
gross salary. A holiday allowance will be paid out in addition
to the employees normal salary. You can pay out this amount
by way of an annual payment or in instalments. The holiday
allowance must be stated separately on the employees payslip.
When someone is leaving your employ, you must pay any re-
maining holiday allowance still owed to them, as part of their
final salary payment.
By law, the minimum number of holiday days to which employ-
ees are entitled each year is four times the number of working

3
days per week. The minimum allowance of holiday days is 20
days per year if working fulltime (4 x 5 days a week).
Updated rules pertaining to holiday allowance have been in
place since 2012. Employers must pay out the minimum allow-
ance even if an employee was ill when their contract was termi-
nated. Since 2012 there has also been a reduced period of time
for when holiday allocation must be used by the employee: it is
now six months following the end of the calendar year in which
the holiday allocation was accrued, instead of the previous five-
year expiration date.

1.3. Do I have to provide a pension scheme?

In the Netherlands, some 90% of employers offer a pension For more information
scheme to their employees. Pension provisions are part of the (in Dutch only):
www.dnb.nl
compensation and benefits package. On 1 January 2007, the
new Pension Act (Pensioenwet) came into force. Unlike the pre-
vious regulatory measures, there is now no obligation for new
employers to provide pension provisions for their employees.
If an employer and an employee have entered into a pension
agreement, the Pension Act contains the terms and conditions
that the pension provisions and agreement must comply with.
One of these conditions is that the pension agreement must be
administered by a pension fund or an insurer that operates in
the Netherlands or in another EU Member State. The Pension
Act also sets out the operating requirements for the pension
fund or the insurer.

1.4. Must I adhere to special rules when hiring

temporary personnel?

There are rules that you must comply with for all personnel that For more information
you hire (see link below). Temporary workers are entitled to the www.answersforbusiness.nl
same wage and other allowances as comparable workers in
the industry in which the worker is temporarily carrying out his
work, unless an (applicable) collective agreement provides oth-
er rules. It is also important to realise that a temporary contract
can be offered no more than three times subsequently. After
the third contract a permanent contract must be offered. The
three contracts cannot exceed a total maximum of 3 years.

4
 As of 1 July 2015, a new law comes into effect (Flexwet), which stipulates
that no more than two years of consecutive temporary contracts are permit-
ted. After two years of temporary contracts, or when a 4th contract is offered,
the presented new contract must be of a permanent nature. It is only possible
to prevent a change from a temporary to a permanent contract if there is a
mandatory period of at least six months between the two contracts. Oth-
erwise it is legally viewed as one contract with consecutive days. Prior to 1
July 2015, this mandatory period is three months. As of 1 January 2015, it is
no longer permissible to include a trial or probation period of one month as
part of a temporary contract that is a maximum duration of six months. This
also applies to consecutive contracts. A temporary contract of six months or
longer may have a notice period of one month.

1.5. It is difficult to find specialised personnel. How

can I connect with the right talent?

Professional service providers such as recruitment agencies

can typically help to connect you with specialised, hard-to-find
personnel. Many agencies focus on specific professional sectors
and have a broad network in their chosen field. Your branch
organisation can advise you on this topic.

1.6. Do I have to follow a collective labour agree-

ment (CAO)?

As an employer you must only apply a collective labour agree- For more information
ment if the Ministry of Social Affairs and Employment has www.cao.szw.nl (in Dutch) and
www.inspectieszw.nl/english or
extended a sector-based agreement in your industry. These
www.english.szw.nl/
agreements will then automatically apply to every employer in
that sector.

5
2.
Personnel Administration

2.1. What actions are required when registering

information in a personnel file?

Identification
If you have a business in the Netherlands and employ staff, you must verify the
identity of all employees on the basis of an official, original identity document
(a driving license alone is not legally sufficient). This applies to both Dutch and
foreign employees. Once you have established the identity of your employee,
you must make a copy of their identity document. The copy must be clearly
legible and the photograph must be recognisable. You must retain this copy for
five calendar years following the termination of the working relationship, period
of employment or activities. With regard to temporary employees, you must
retain the copy for seven years following the end of the activities or period of
temporary work.

Other information required in a personnel file

Other information that is often found in a personnel file includes the following:
1. Correspondence; 2. Personal details; 3. Contracts; 4. Compensation and
benefits; 5. Performance/Appraisal; 6. Training & Development; 7. Insurance; 8.
Health; 9. Other information.

Ad 1. Correspondence
On salary, terms of employment and job changes, job offer, a recruit-
ment checklist.

Ad 2. Personal details
Personal information form (personal Master Data), tax form, copy of ID/
passport, curriculum vitae/application letter, recruitment agency agree-
ment, work permit (if applicable).

Ad 3. Contracts
Original signed employment contract, changes to the employment
contract, user agreement for mobile telephone and/or laptop, user
agreement for lease car.

6
Ad 4. Compensation and Benefits
Changes in employment conditions i.e. salary adjustments, letters on
bonus objectives and bonus awards, pension statements, savings.

Ad 5. Performance/Appraisal
Job description, completed performance forms and appraisal forms,
correspondence about performance.

Ad 6. Training and development

Application forms for training & development, copies of invoices and
declaration forms, diplomas.

Ad 7. Company Health Insurance

Ad 8. Health
Correspondence regarding occupational disability legislation (Poortwa-
chter), pregnancy statement.

Privacy
Access to information about employees should be strictly limited to those in
your company with a need to use such information as part of their standard em-
ployment role. Privacy of your employees is protected under the Personal Data
Protection Act (Wet bescherming persoonsgegevens).

7
3.
Dismissing personnel,
labour laws
3.1. What steps should I follow when dismissing an
employee?

If an employer wishes to terminate an employees employment

contract against the wishes of that employee, they must adhere
to a strict procedure. Nobody can be dismissed without proper
cause. The employer must apply for a dismissal permit from
UWV (Employee Insurance Agency) or ask the sub-district court
to dissolve the employment contract.

As of 1 January 2015, employers can only opt for one dismissal route and
which route is taken depends on the specific reason for the dismissal. You
cannot, for example, dismiss someone (even during their trial period) on the
grounds of gender, disability, religion, illness or pregnancy.

Acceptable reasons for dismissal are:

For (business) economic reasons, for example if a reor-
ganisation is taking place or a company is closing down or
relocating. It can also occur when (part of) the companys
activities are being closed down. Since 1 March 2012, if
more than 20 employees are being dismissed, this must be
reported to the UWV (Wet melding collectief ontslag).
If an employee does not perform well or is no longer suita-
ble for the job. But not if this is the result of illness.
Please note: as an employer, you must have highlighted on
multiple occasions that the employee is performing insuf-
ficiently, preferably recorded during an official appraisal or
performance interview. Before dismissal, the employee must
be first provided time to improve their performance.
If there is a conflict with your employee and the relation
between you and your employee is beyond repair.

8
 If your employee has serious conscientious objections to
their duties and you are not able to offer a different role or
suitable work.
If an employee is long-term occupationally disabled (mini-
mum of 2 years).
For improper conduct, for example if the employee forges
certificates; threatens colleagues; endangers themself or
others; if an employee does not observe the duty of confi-
dentiality; steals; refuses work without good reason; comes
to work under the influence of alcohol or drugs.
If you and your employee mutually agree to the dismissal.

DISMISSAL ROUTE

As of 1 January 2015, rules regarding the dismissal route and severance

pay have changed. Prior to 2015, the dismissal of any employee was audited
by the UWV (Employee Insurance Agency) or the district court in regards to
whether the dismissal was legally valid. As of 1 January 2015, employers can
only opt for one dismissal route and which route is taken depends on the
specific reason for the dismissal:

A dismissal for (business) economic reasons and a dismissal for an em-

ployee that has been long-term occupationally disabled (minimum of two
years) must be processed by the UWV.
A dismissal for other reasons must be processed by the district court.

Mutual termination agreement

It remains possible for an employer and employee to mutually agree to the
dismissal. The employee then has a cooling-off period of 14 days in which
they can change their mind. It is mandatory for the employer to notify the
employee of this cooling-off period.

9
SEVERANCE TRANSITION BUDGET

As of 1 January 2015, another change to dismissal law relates to severance

pay. Irrespective of the termination route, the government stipulates that
permanent and temporary employees who are dismissed must be awarded a
transition budget. This replaces the previous severance payments. The em-
ployee can use the transition budget, for example, for training or assistance
to transfer to another job.

The agreements on the transition fee are as follows:

The employer will pay this fee to an employee who has worked for two
years or more with the employer. In the case of a dismissal by severe
culpability of the employee, the employee is not entitled to the transition
fee.
The owed transition fee is accrued per year of service. The rule is: 1/3
of a months salary per year of service up to 10 years; 1/2 of a months
salary per year of service that an employee has been employed beyond
10 years.
The transition fee may not exceed 75,000 or a full years salary (which-
ever is highest).
The employer can consider the costs of, for example, outplacement or
training, deducting such costs from the final transition fee. These costs
must have been incurred to help the employee following dismissal and
in full consultation with the employee. Costs incurred during the employ-
ment period to make the employee more employable may also be de-
ducted by the employer on condition that the employee also agrees to
this.
The sub-district court may yet grant an additional fee if the employer is
judged culpable.

10
4.
Sick Leave

4.1.What are the rules pertaining to an employees

illness and subsequent absence from work?

Occupational disability legislation (Wet Verbetering Poortwa- More information

chter) has been in place since 1 April 2002. This law is intend-
Setting up a Health, Safety &
ed to help workers reintegrate and to prevent them from an Welfare service (Arbo):
unnecessarily long stay at home due to illness. The employee www.dearbocatalogus.nl
and employer must work together to ensure that the employ-
ee returns to work as soon as is possible. Under this law, both More information on the Working
Conditions Act:
parties are obliged to cooperate. Both employer and employee www.arboportaal.nl
and a Health, Safety & Welfare service (Arbodienst) or another
certified company physician must play an active role in the
reintegration process.

If the employee is no longer able to carry out their contracted

job role due to an illness or disability, the employer must ex-
plore whether there is another suitable employment opportu-
nity within the company. The employer can hire a reintegration
bureau for this task. Together with the bureau, the employer
can look at the various possibilities available to them.

Occupational disability legislation has, in short, the following

requirements:

Cases of illness should be reported on time to the Health,

Safety & Welfare service/certified company physician.
The Health, Safety & Welfare service/certified company
physician supports managers in absenteeism (verzuimbege-
leiding).
It must be determined whether there is a risk of prolonged
absence. In that case, a problem analysis and an advice
report should be drafted (in the sixth week of illness).
Employer and employee establish a plan of action for reha-
bilitation and reintegration. This is based on a problem anal-
ysis and the advice of the Health, Safety & Welfare service/

11
 company physician. This plan of action is regularly reviewed
and adjusted wherever necessary.
Employer and employee designate a case manager.
Reporting illness to the UWV in the 42nd week of illness.
Creation of reintegration file containing all listed activities
and agreements.
Drafting a reintegration report after 20 months of illness
(at the latest), together with the application for Work and
Income according to Labour Capacity Act (WIA). These
should be sent to the UWV after 21 months of illness (at the
latest).

4.2. Reintegration File

As part of any anticipated long-term absence, all parties are

obliged to maintain a reintegration file. In this file, the employer
must include all important reintegration activities. Compilation
of the reintegration file should begin eight weeks after the
employee first reported sick.

The file consists of all documentation relating to the employees

reintegration, such as a plan of action, the reintegration report
and correspondence with the occupational Health, Safety &
Welfare service (Arbodienst). The employee can hold the em-
ployer and the Health and Safety service/company physician
answerable to their obligations and is entitled to a summary
of the reintegration report to include with their application
for WIA support. Afterwards, the process is reviewed by the
UWV. If the efforts of reintegration are considered inadequate,
penalties will be applied. The UWV can provide assistance with
standard forms.

4.3. Penalties

If an employers reintegration efforts are shown to be insuffi-

cient, the maximum penalty is one years salary in the third year
of illness. In the case of an employee who has not demonstrat-
ed a willingness to return to work, the UWV can postpone the
assessment for the WIA support. This may result in the employ-
ee being temporarily without income.

12
5.
Works Council

5.1. What are the rules regarding staff representation or a Works

Council??

According to the Works Councils Act (Wet op de ondernemingsraden) every

business with at least 50 employees must have a works council. The employer
must ensure that this works council is established. Businesses with between 10
and 50 employees may also establish a voluntary works council or a staff rep-
resentation system. A staff representation system is obligatory if the majority of
employees want one. Businesses with between 10 and 50 employees that do
not have a works council or a staff representation system are obliged to hold
staff meetings.

13
6.
Setting up an effective
HR structure
6.1. Can you advise me on setting up an strong HR structure in our
company?

As an example, you could take the following steps to establish an effective HR

structure, which can be customised to fit the companys size and your start-up
situation. A step-by-step plan to strengthen HR within your company could
include the following:

A. Setting up a structure for Personnel in terms of employment and engage-

ment (e.g. benchmark salaries, compensation and benefits in the market),
and designing a salary structure (flexible while abiding to personal wishes).

B. Designing an Appraisal form & process and related instruments.

C. Setting up a Sick Leave policy (Wet poortwachter), which is mandatory by

law. Health, Safety & Welfare services can assist you in this.

D. Empower the Managers for tasks with an HR responsibility. For example,

create a clear division of responsibilities and set up a safety net for special-
ised HR questions, providing managers with extra HR knowledge. Specialist
companies can offer advice when needed. Knowledge about redundancy
law (Wet poortwachter), the Working Conditions Act and tax laws (e.g. dec-
laration of travel allowances and other allowances) are very important and
should be available, whenever needed, to your company and managers.

E. Setting up a Personnel Handbook with, for example, the following rules

and regulations:
a. Pension scheme (if applicable).
b. Employee savings scheme (Vitaliteitssparen, in force since 2012 as a
replacement for the Levensloop and spaarloon saving schemes).
c. Time off for emergencies regulation (mandatory by law).
d. Time off for parenting scheme (mandatory by law, Work and Care Act).
e. Carers leave (paid/unpaid) (mandatory by law).
f. Overtime policy (applying the Working Hours Act).

14
 g. Travel allowance or regulation scheme (home-work/work-work)
(compliant with the tax rules/tax free stipulation).
h. Holiday entitlement, allowance and regulations (mandatory by law).
i. Illness rules and regulations (mandatory by law, Working Conditions
Act).
j. Health, hygiene and safety at work (mandatory by law, Working
Conditions Act).
k. Study and development policies.
l. Appraisal policy and instruments.
m. Insurances and policies already implemented.
n. And other new policies specific to your company.

F. Setting up a structure for supporting People Management (including divi-

sion of responsibilities, retention and education).

G. Setting up a structure for Internal Communication.

H. Setting up a structure for Labour Market Communication and recruitment

and having a specific plan for specialised personnel needs.

6.2. Where can I find more information about HR-related issues?

For most of your HR-specific questions or services, specialised service providers

can be hired or contracted. These third-party service organisations can be found
for all specific areas of the HR field.

Accountancy bureaus for tax laws; Health, Safety & Welfare service providers
for implementing the Work and Care Act, the Working Conditions Act, occupa-
tional disability legislation and providing a company physician; Temp agencies
(Uitzendbureau) and Recruitment agencies (Werving & Selectie bureau) for
recruiting specific or temporary personnel; Outsourcing of personnel adminis-
tration and/or salary administration (both can be handled by specialised compa-
nies, including payroll); Employment lawyers (Arbeidsrecht juristen) can advise
you on labour laws and dismissal rights.

Other important links on Dutch Labour and Tax laws

Provided by the Dutch government: www.answersforbusiness.nl
Provided by the Ministry of Social Affairs and Employment: www.english.szw.nl

15
This document outlines the principles of Dutch labour law that may be
applicable to (international) employers. Despite making every effort to
ensure the accuracy of the information contained in this document, the
City of Amsterdam cannot accept any liability related to possible inaccura-
cies or erroneous information. No rights, of any kind, can be derived from
information contained within this document. It is advisable to always seek
expert advice prior to taking any form of action based upon the informa-
tion contained in this document. Should you encounter information in this
document that you believe to be incorrect or antiquated, please contact
us by telephone or email.

16