HR Consultancy in the Netherlands
IRIS HR consulting has experience helping businesses grow in the Netherlands. Without expert guidance, it can otherwise be risky and costly to leave local laws and legislation open to interpretation. For a scalable, compliant operation, IRIS can manage your HR in the Netherlands to help businesses hire, recruit, and pay staff overseas in new, unfamiliar countries. As a popular destination for businesses, IRIS can navigate local barriers – from culture to compliance – to arrive at a rewarding opportunity for your business to thrive in this exciting marketplace.
Take your business to the Netherlands with the help of specialist HR consultants at IRIS.
Global expansion in the Netherlands
A Dutch Tax Treaty Network
A central, advantageous geographic location, the Netherlands is a thriving trading hub for Europe, the Middle East and Africa, too. Its known, the world over, for its “open” economy, because of its key trading partners and routes, with accessibility to many neighboring countries and continents. The Netherlands has a long history of attracting business investment from markets far and wide, eager to take advantage of the trading pathways the country’s economy benefits from. At a glance, the Netherlands is a country known for its innovation as much as its infrastructure, including Europe’s largest port, Rotterdam. The economy is motivated by a competitive business market, which is conducive for growth, and a powerful treaty network.
As one of their local business languages is English, businesses can confidently hire and recruit from the Netherlands without cultural barriers. The Netherlands, which is globally oriented, boasts a highly educated migrant workforce and diverse skill availability.
For businesses expanding into the Netherlands, the NFIA (the Netherlands Foreign Investment Agency) is a gateway into its local markets and beyond. This national agency is designed to help business investment acclimatize to this new, exciting Dutch market.
The Netherlands can be referred to as a conduit country, meaning it’s strategically bridged to other countries using tax-incentivized routes. These tax routes, a sense of interconnectedness within a global framework, is a way for multinational businesses to reduce their taxes. The Dutch tax treaty also sees the ebb and flow of international investment and profit. The Dutch tax treaties work with multiple countries, including developing nations, or more established ones such as the UK.
The Netherlands uses treaties to capture key partnerships and interest with other countries, which includes anything from taxation, extradition, and human rights.
A Guide to Employing Staff in the Netherlands
Everything you need to know about the employment laws and compliance requirements in this country
Establishing your business into Dutch markets
Embarking on a global expansion is a strategic move to gain extra value from exciting foreign markets, which are constantly evolving and full of opportunity. But the international stage isn’t always easy to navigate.
Yet, before establishing your operation in these Dutch markets, you must ensure compliance with employment law.
Starting a business in the Netherlands can be economically beneficial, but there are different entry points for every enterprise, large or small. With local guidance, forming a business means navigating the Dutch environmental regulations, tax system and social security requirements.
The mandatory requirements include:
- Identify where you’re starting from – because every business is unique.
- Hatch early busines plans, which is an opportunity to explore how your business will be financed, its legal business structure, and the company formation.
- Select your business structure, also known as a rechtsvorm. You will need to choose between sole proprietor (eemanszaak) or private limited company (bv).
- Register with the Commercial Register (Handelsregister) at the KVK.
- Register fully with the Commercial Register and Dutch Tax Administration (or the KVK)
- Register as an employer, including payroll taxes and social security.
Employment laws in the Netherlands
When first expanding your business into the Netherlands, navigating local laws, legislation and rules of employment laws is no mean feat, especially if you’re unfamiliar with the country’s driving policies like its stance on environmental impact. Throughout Europe, these laws are almost never universal. Rather, employment is dynamic and reflects the countries social, economic, cultural opportunities.
Did you know?
The majority of companies will reimburse full travel costs to employees monthly. Many other companies offer other reimbursements, such as paying a percentage of gym or club memberships, to encourage their employees to stay healthy physically and mentally outside of the workplace.
Hiring & recruitment in the Netherlands
When getting your first hire overseas, you will need to negotiate terms of employment. But that requires local knowledge, strict compliance, and an understanding of what to include in an offer.
The major driver of employment relations in the Netherlands is governed by key legislation, including the Dutch Civil Code and various other statues, such as Working Hours Act, Working Conditions Act, Act on Minimum Wages and Minimum Holiday Allowances.
Work visas in the Netherlands
There are several work permits or visas available for those seeking employment in the Netherlands, including highly skilled migrant schemes, an entrepreneurial permit, and a GVVA or single permit. For those who are EU or EAA residents, there are no specific requirements for any documents.
Employment rights & contracts in the Netherlands
A Dutch employment contract can be confirmed orally, yet it’s highly recommended that all parties affected by the proposed employment agreement are captured in writing. There are key provisions, especially for employers, that are only activated when a signed and written contract validates employment.
Captured within this key documentation, employers should notify:
- Terms and conditions of employment.
- Salary/ compensation in Euros.
- Any additional perks, such as benefits, or compensation.
Some companies opt into a Collective Bargaining Agreement (CBA), but this can be based on the status of employment and the type of industry.
What are the working hours in the Netherlands?
The average working hours should not exceed 55 hours per week over a period of 13 weeks, or 48 hours over a period of 16 weeks. Collective agreements (CBA) often provide for normal working time of less than 40 hours per week, where this option governs employment.
Equal Opportunities in the Netherlands
The principle of equal treatment in the workplace is a captured in the Dutch Constitution, Article 1. This spells out the expectations of workplace inclusion, where parties are should be treated equally an fairly.
Additional or Bonus Pay in the Netherlands
In addition to their regular salary, employees are entitled to an 8% vacation allowance accruable monthly. This is expected to be paid out once a year, normally in May.
Overtime in the Netherlands
There is no specific ruling that governs the benefit of overtime, therefore employers should ensure this is clearly defined in an employment agreement and/ or handbook.
Public Holidays in the Netherlands
In addition to vacation time, public holidays in the Netherlands are celebrated as days off for employees. In total, there are 10 national public holidays, including:
- New Year’s Day
- King’s Day
- Easter Sunday and Monday
- Liberation Day (official public holiday every 5 years; again in 2020)
- Ascension Day
- Pentecost Sunday
- Whit Monday
- Christmas Day
- Boxing Day
Sick Leave in the Netherlands
Sick leave is a benefit that is determined under Dutch law and driven by the type of employment agreement. Sick leave, depending on these conditions, will either be paid by the employer or the UWV.
Under Dutch law, sick leave is payable for the first two years of illness, during which time an employee cannot reasonably work due to illness. At a minimum, this is payable at 70% of the employee’s salary. If the 70% is below the statutory minimum pay, then sick pay will rise until the requirement is fulfilled.
Maternity Leave in the Netherlands
Maternity leave in the Netherlands entitled female employees to 16 weeks of paid leave. This period of maternity leave can be activated from 6 weeks prior to the expected birth and continues for 10 weeks thereafter.
In terms of paternity leave, male employees can access 2 days of paid leave and 3 days unsalaried.
Parental Leave in the Netherlands
All employees responsible for caring for a child younger than eight are entitled to unpaid leave in the Netherlands.
- Employees are entitled to parental leave for each individual child.
- The entitlement carries for up to 26 times their weekly working hours.
- The expected arrangement is that an employee can work half their normal hours.
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Deliver your business to new, exciting markets with confidence and compliance.
End of Service
HR in the Netherlands requires compliance not only during an employee’s service, but also at the end of it. End of service might include severance, termination, redundancy, and leaving packages. Or, for globally mobile companies with teams in foreign markets, this could be repatriation services for those returning from an assignment overseas.
For these more complicated matters, you will need expert HR guidance to navigate Dutch labor laws and remain compliant.
Retirement & pensions in the Netherlands
Known for a robust, reliable and sustainable pension scheme, the Netherlands is a considerably a strong climate for retirement. The pension scheme stands on three key pillars: workplace, private or state. For state pension, administered by the Sociale Verzekeringsbank (SVB), the General Old Age Pensions Act (Algemene ouderdomswet or AOW) can be referred to for guidance. It’s generally considered a pay-as-you-go scheme, with employee insurances contributing to the end pot.
Termination (including Severance) in the Netherlands
Normally, for matters of premature termination, a contract will contain this clause and prior permission will need to be received from the Employee Insurance Agency (or UWV). Alternatively, a petition at the cantonal court for the dissolution of employment can be submitted for approval.
Reasonable ground (and evidence) will need to be established before dismissal, as the UWV or cantonal court will require this before agreeing on an outcome.
A settlement agreement between both parties can be used to amicably resolve a dismissal.
In the Netherlands, Employer Liability Insurance does not cover employees for motor vehicle accidents, even whilst driving on behalf of the company. Consequently, as a protection against such liabilities, Dutch companies secure themselves with WEGAM insurance.
Most companies insure their employees for accidental death or disability since this is a relatively cheap insurance to purchase. This is normally 1x salary for accidental death and 2x salary in the event of accidental disability.
It is mandatory for employees to purchase their own medical Insurance. The additional cover can be paid either by the employee or subsidised by the employer. Where companies have only limited numbers of employees, a cash contribution towards the private element, which may be capped at a set rate per month, is usually provided in lieu of an actual group medical plan.
The employer is legally obliged to continue with salary payment for up to 2 years at a minimum rate of 70% of the (capped) daily wage, in the event of employee sickness absence.
Approximately 90% of Dutch companies provide access to a pension scheme via the employer, or offer assistance with an individual private pension plan.
It is not common to implement a separate ‘life insurance’ scheme in the Netherlands; typically, a survivor’s pension is built under the umbrella of the pension plan.
Long Term Disability (LTD) Insurance
Some employers provide additional long-term disability insurance to cover 70% of pay, including social security (WIA) and is made up of two insurances; a WIA-gap insurance and a WIA-excess insurance.
Why Partner With IRIS?
When entering new, exciting countries like the Netherlands, you will need an employment specialist or an HR consultant to navigate the parts of local laws that are mandatory and those that are not. Delivering a compliant solution, IRIS can help your business arrive into new marketplaces whilst protecting your workforce – our partners can discover power and protection through us.
Overseas expansions can seem risky to those who dare it alone. Understanding the complexity of a fully complaint solution, IRIS can help businesses establish a foreign branch in the Netherlands without the hassle.
Our cost-effective, knowledgeable approach to HR consultancy in the Netherlands makes us an ideal partner to commence your overseas plans.