Hiring in the Netherlands
A business-friendly environment with a highly skilled workforce, the Netherlands is a top hiring location for multinational organizations. However, Dutch labor regulations can be complex. Employment relationships in the Netherlands are governed by the Dutch Civil Code, the Working Conditions Act, and various collective labor agreements. These collective labor agreements (known as collectieve arbeidsovereenkomst or CAOs) can be negotiated between unions and individual businesses (company CAOs), or between unions and employer associations that represent multiple employers (sectoral CAOs). Sectoral CAOs may be universally binding for all companies in the sector, which can make employment contracts in the Netherlands particularly complicated.
With Safeguard Global as your partner, you can hire employees in the Netherlands with confidence, knowing that every contract meets legal standards. We also provide guidance on cultural expectations and hiring best practices, while helping you stay current with regulatory changes.
Relying on an employer of record (EOR) in the Netherlands
An employer of record (EOR) provides an easier way for organizations to hire and pay local talent in the Netherlands. Because of its in-country presence, the EOR can employ the workers a company needs and lease them to that company, taking care to comply with Dutch labor laws. As a result, the organization doesn’t have to establish a legal presence or manage compliance in the Netherlands.
The EOR can hire and onboard employees in as little as two weeks and manage ongoing responsibilities such as payroll, benefits, and taxes. A full-service EOR can also manage recruitment. Together, these EOR services significantly reduce the administrative burden for an organization.
Visit our Employer of Record services page to learn how we can help you meet your international employment needs in the Netherlands.
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How to hire in The Netherlands
Whether your business is looking to hire in the Netherlands because of a unique market opportunity, or to capitalize on a particular skill set or expertise, it’s important to understand what’s required by local laws and expected by local candidates.
Hiring in any country requires a legal entity so that the business can be properly regulated, taxed, and operated. The good news is you don’t necessarily have to establish an entity to start hiring. Businesses can leverage global PEO providers to accelerate the hiring process, while they establish their own legal entity. With so many ways to build a team, we’ve outlined some things to know about hiring in the Netherlands.
3 Tips for Hiring in the Netherlands
1. Use a Global PEO
When it comes to hiring in the Netherlands, one of the first decisions you’ll need to make is whether to do your own recruiting or ask for assistance. While DIY could save you money in the short term, a PEO can help with services in hiring, payroll, HR, and recruitment efforts.
PEOs can have access to databases of qualified candidates all over the world. This can help speed up the search process and hire the right person for the position. They also support you during the candidate screening to ensure your time isn’t wasted.
Hiring Dutch employees requires some sort of legal entity, and a PEO already has them established in the country. The process of setting up your own entity can take over six months. But that’s no reason to delay the hiring process. Companies can leverage a PEO while their own entities are established.
2. Leverage Online Networks
Even with a tough job market, businesses can still use online job portals to hire, as a lot of hiring now happens online.
Employers can make listings for local employees in the Netherlands using sites like Vacaturekrant, Werk.nl, Monsterboard.nl, or Nationale Vacaturebank.
Keep in mind that one of the challenges of online hiring is availability. You may not find qualified candidates in a competitive market. This is where recruitment becomes a valid strategy to lure away workers from their current positions.
That said, online advertisements can help you see what talent is available for a relatively low cost. Also consider using social media, especially LinkedIn, during your search. For personal information, the Netherlands follows the GDPR laws of the EU.
3. Provide a Great Experience
A positive working condition within your company can help you attract top candidates for your Netherlands job search. When possible, speak Dutch to your candidates, even if they know English. Unions may ask businesses to provide employment contracts in the employee’s native language.
This is not just a courtesy but a requirement in some cases.
From recruitment to onboarding, your business should have a clear structure and processes for new hires. Developing an onboarding plan will help new global employees learn the ropes and integrate with the team. This further creates a strong employment relationship.
An effective plan will start before the employee even starts their first day of work. Use technology to your advantage so you can schedule your interviews quickly and save time for other important initiatives.
Related: Maintaining company culture while growing a global workforce.
Employment Law in the Netherlands
Collective Labor Agreements
Trade unions are an integrated part of the Dutch economy. Employers must adhere to the terms of a collective labor agreement, in addition to the Dutch employment law. Oftentimes employers can negotiate the terms with the trade unions before entering an agreed-upon arrangement.
Approximately 20% of Dutch workers are members of a trade union. More than 80% of Dutch workers have a labor agreement known as Collectieve Arbeidsovereenkomst (CAO).
The Minister of Social Affairs can decide if an agreement applies to an entire industry based on job conditions. This is an important distinction as your company may be part of a collective agreement by default. CAO terms are usually reviewed and negotiated every few years.
If a company is not under a CAO, it still needs to create legal employment terms in a contract with employees. This protects both the employer and employee from potential disagreements.
Working Hours
Under the Working Hours Act, the maximum workday is 12 hours and the maximum workweek is 60. However, employees cannot work the maximum hours over consecutive weeks, for instance:
· 48 hours over 16 weeks
· 55 hours over four consecutive weeks.
Having said that, most CAOs limit this to a 40-hour maximum working week. Seasonal work, peak times, and unforeseen circumstances often result in exceptions. During such exceptions, employees can temporarily work more hours per day, as needed.
The Working Hours Act sets rules for breaks working on Sundays and other nonstandard times. If applicable, review your CAO to see if any other additional restrictions apply to your business.
Time Off Requirements
An employee’s working hours are directly correlated to the paid holiday leave. Full-time employees get four times the number of days that they regularly work each week. This means an employee working 40 hours per week is entitled to 160 hours of vacation leave throughout the year.
The unused time can be carried over to the next year and must be used within the first half of the following year.
Additionally, the Netherlands has 10 public holidays. The law does not stipulate that certain public holidays are days off for employees. However, some CAOs may require employees to take specific holidays off. Furthermore, employers may pay time off to employees who are ill or pregnant. Employees with contracts receive up to two years of paid sick leave at a minimum of 70% of their wages. During pregnancy, employers pay 100% of wages, later reimbursed by the Employee Insurances Institute (UWV) from the government.
Compensation
The Netherlands uses the euro as its currency. The government changes the minimum wage rates twice a year, so it’s important to stay up-to-date on any changes. Regulations define rates in terms of daily, weekly, or monthly pay rather than hourly rates.
Just like the other sections, CAOs may determine their minimum payment rates for workers in a particular industry. Employees should check their CAO or contract for overtime rules since there are no official policies in place.
Some CAOs provide an end-of-year bonus that is as much as an extra month’s worth of pay. Dutch workers receive an annual holiday allowance usually in May. A salary agreement must include information on holiday pay when it comes to a yearly salary.
Related: Payroll tax in the Netherlands, everything you need to know.
Taxes and Social Insurances
Employers are responsible for withholding salary tax on employee paychecks as an advance payment of income tax. They also must withhold other taxes for things such as:
· National insurance
· Employee insurance
· Healthcare insurance contributions
· Pension plans
Taxes in the Netherlands pay for unemployment benefits, work and income, and invalidity insurance. The government checks these rates every two years.
What’s the Difference? Hiring International Contractors or Employees.
Global PEO Services
Global PEO Services, a Safeguard Global company, is constantly monitoring international HR trends for businesses. We help companies expand globally without setting up legal entities or dealing with related talent acquisition, HR, benefits, payroll, tax, and compliance issues.
Hire employees fast, test new markets, and respond to growing business needs quickly while leaving the compliance and operational burden to us. With our Professional Employer Organization (PEO) or Employer of Record (EOR) services, you get full control. All without taking on legal entity liabilities, contractor risks, or sacrificing on talent and speed to market.
Payroll & PEO in The Netherlands
Netherlands Payroll Outsourcing & Management Services
Hire and pay employees in Netherlands without setting up a legal entity. With our Netherlands payroll and PEO services, you select the candidate, and we handle the rest.
After successfully hiring and onboarding your employees, we manage all aspects of the payroll process, ensuring your employees are always paid accurately and on time.
Our Netherlands payroll experts have an in-depth understanding of local payroll requirements and provide you with in-depth guidance and compliance support.
Our Netherlands PEO Payroll Solutions Cover:
Struggling to Manage Payroll for Independent Contractors?
Global PEO Services eliminates the complexity and liabilities associated with employing and paying independent contractors. We allow you to hire your contractors as employees through our Netherlands PEO. The individual continues to work for you, while we manage all aspects of payroll, HR, tax, and compliance.
The Solution to Low Headcount Payroll
Finding a payroll option for countries where you have low headcounts can be a challenge. Global PEO Services provides the solution. By using our Netherlands PEO to manage your payroll, you leverage our pre-existing payroll infrastructure, teams, and processes, even if you only need payroll for just one employee. Stay flexible, save time, all while getting the payroll services and support you need.