Congrats on landing your first job and embarking on the adventure of working in the Netherlands! Or perhaps you’re still in the interviewing process, but you’d like to understand what you can expect. Either way – you’re in the right place! 

As an expat, Jelena has signed her first employment contract with asking no questions, and without really understanding her rights. Kris on the other hand is a legal professional who specializes in Human Resources. That’s one of the reasons we are so passionate about making sure all newcomers to the Netherlands feel confident and understand exactly how their employment relationship is governed. 

An important disclaimer to add here is that we’ll be discussing direct employment contracts in this blog post. If you work through an “uitzendbureau” (an employment agency for temporary or occasional employment) or with a zero-hour contract, the rules can be a bit different. This is by no means an exhaustive guide, but we’re hoping this will be a useful starting point for your journey into understanding your rights and obligations as an employee.

Probation and contract duration

Many expats are shocked when they’re offered a fixed-term contract instead of an indefinite one. Dutch employment law has built in protections for the employees. Due to this, it is very difficult for an employer to terminate the contract post the probationary period. Many companies try to put themselves into a slightly better position by making their first contract a fixed-term one (so it acts as a longer probation). The first contract is usually for 6 or 12 months.

If we talk about the probationary period – it is limited to 2 months at most for indefinite contracts. 

A fixed-term contract for 6 months cannot have a probationary period, and one that lasts a year can have a probation of 1 month.

In either case, an employer cannot offer more than 3 fixed-term contracts in a row, or fixed-term employment cannot last longer than 3 years (whichever comes first)

Termination and notice

The statutory notice period both for the employee and employer is one month. If your contract doesn’t name a specific notice period, that means the statutory notice is observed. 

Note that this is a calendar month, which means that if notice is given on June 15th, the notice period actually starts running as of July 1st (making July 31st the last day of employment)

If the employer wants to make the notice period any longer, the term doubles for them.

What that means in practical terms is that if the notice period for the employee is increased to 2 months, it’s 4 months for the employer. 

Holiday accrual

As a full-time employee, you are entitled to 20 days of statutory annual holiday by law.

In the Netherlands, having 25 holidays is considered a good benefit.

Remember, regulations ensure you can take your holidays, and it’s advisable to do so. Any unused statutory vacation days expire in June of the following year or can be disbursed upon request.

Salary and holiday allowance

Most Dutch employers pay salaries on the 25th of the month, and the salary is paid on your bank account.

You also have the holiday allowance of 8% as a part of your salary. Dutch companies pay this out in two different ways:
– annually, usually in May (most older companies and corporations do it this way)
– monthly, as a separate part of the salary (this is something “younger” companies do as it “increases” the employee’s monthly salary)

Pension

There are three main pillars of pension in the Netherlands:
1.  statutory old-age pension (this is called AOW – the premium you’ll be contributing to this will be 17,9% per month)

2. company/occupational pension (not mandatory in most industries; if you’re working via a payrolling company or an Employment of Record provider, they are obliged to offer an Adequate Pension Plan, and contribute 15.7% to your pension every month)

3. voluntary pension (which you could get for yourself in case you want to build an even higher pension, you can do this with one of the private pension providers) 

Illness and incapacity to work

Under the Dutch law, you can be on sick leave for up to 104 consecutive weeks. 

Your employer needs to keep paying at least 70% of your base salary during this time, but the actual sick-payments are depending on various factors such as internal company policies and/or collective labor agreements.

Most contracts will state the percentage of coverage in the first and second year of illness. It will also state if there’s a period of the first several days of illness that are not paid, or paid at a different rate. 

Most common benefits

In the Netherlands, every individual must have a basic health insurance package. This is an individual responsibility, and thus not something your employer has to take care of. Some employers will offer a collective health insurance plan for their employees, but this is not very common.

Some employers will offer a monthly health insurance allowance, that will cover anywhere from 50% of your insurance price, to the whole amount – this really depends on their internal policy, as it’s not mandatory for the employer to cover this cost.

Other benefits an employer could offer are – a subscription to a bike rental, a lease car, reimbursement of travel expenses, working from home, education budget…

General contract terms

One thing to keep in mind is that your employer can change the contract without your permission only if the change is something that is an improvement for you (so for example – they’ll increase the percentage of their pension contributions, or give you more paid time off)

For anything else, the employer will need your explicit written consent (for example – if they want to decrease your salary, or decrease your working hours) 

You have other questions? Reach out, and we’d be happy to take a look at your contract together, or clarify any of your rights or obligations as an employee.