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Welcome to our quarterly employment update. This update contains a selection of the most important employment law developments in the Netherlands, with respect to legislation and case law.
Legislation
Amendments for employers as of 1 January 2025
1. Enforcement false self-employment: partial extension of the ‘soft landing’
As of 1 January 2025, the Tax Authority resumed enforcement on the classification of working relationships for payroll tax purposes. During the first year, a so-called “soft landing” was in place. The plan had been to return to normal enforcement and penalty rules as of 1 January 2026.
On 18 December 2025, however, the government informed the House of Representatives that the soft landing will be partially extended through 1 January 2027. This means that in 2026 the Tax Authority will not impose default penalties (verzuimboetes) and, as a rule, will begin its supervision with an on‑site visit. That said, penalties (vergrijpboetes) in case of bad faith may still be imposed where there is intentional wrongdoing or gross negligence. The Tax Authority also retains the ability to issue additional tax assessments retroactively for the period starting 1 January 2025.
2. Equivalent employment conditions for temporary agency workers
Effective 1 January 2026, the new Collective Labour Agreement for Temporary Agency Workers 2026-2028 entered into force. From that date, the overall package of employment conditions for agency workers must be at least equivalent to those of employees in the same or comparable roles who are employed directly by the hirer. Individual employment conditions do not have to be replicated, but should be equivalent in the aggregate. For the future, this principle will also be laid down in the More Security for Flexible Workers Act, the relevant part of which is expected to enter into force on 1 July 2026.
3. New pension system
On 1 January 2026, more than 9.5 million pensions will move to the new pension system under the Future of Pensions Act (Wtp).
4. Increase in the minimum hourly wage
The minimum hourly wage is increasing due to indexation. For employees aged 21 and over, the minimum gross hourly wage will increase from EUR 14.40 to EUR 14.71. For employees aged 15 to 20, youth minimum hourly wages apply; these are calculated as a percentage of the standard minimum hourly wage.
5. Increase of maximum remuneration under the WNT
For 2026, the general remuneration cap under the Executives' Pay (Standards) Act (WNT) has been set at EUR 262,000 (2025: EUR 246,000). The WNT limits the remuneration of senior executives in the public and semi‑public sector. Different sector‑specific caps apply in the education, culture, media, housing association, healthcare, and development aid sectors. A higher cap applies to health insurers. An overview of the WNT remuneration caps for 2026 is available on topinkomens.nl. The new Implementing Regulations WNT 2026 and the Policy Rules WNT 2026 have also been published.
6. Tax‑free homeworking allowance and travel allowance
The tax‑free homeworking allowance will increase to a maximum of EUR 2.45 per day in 2026 (2025: EUR 2.40).
The maximum tax‑free travel allowance remains EUR 0.23 per kilometer.
7. Reimbursement of extraterritorial costs (ETK scheme)
The scheme for reimbursing extraterritorial costs will be scaled back. This means that certain costs can no longer be reimbursed tax‑free from 2026. These include additional cost‑of‑living expenses, such as gas, water, electricity and other utilities, and additional private call charges with the country of origin.
8. Maximum pensionable salary
As of 1 January 2026, the maximum pensionable salary remains unchanged and is provisionally set at EUR 137,800 gross.
9. Transition payment
The statutory transition payment upon dismissal will increase to a maximum of EUR 102,000 (currently: EUR 98,000). If the employee’s annual salary is higher than EUR 102,000, the maximum equals one gross annual salary.
10. RVU: threshold exemption and levy
The RVU threshold exemption will increase to EUR 2,357 gross per month. To make the RVU more accessible for employees with a low income or little supplementary pension, employers may grant up to an additional EUR 300 gross per month on top of the basic RVU benefit.
In addition, the rate of the pseudo‑final levy on any RVU amount above the threshold exemption will be increased in stages: 57.7% in 2026, 64% in 2027 and 65% in 2028.
11. Excessive severance payments
Employers are liable for a 75% levy for excessive severance payments. This pseudo‑final levy applies only if the reference salary exceeds the threshold amount and only to the extent the severance payment exceeds that threshold. The threshold will increase to EUR 700,000 in 2026 (currently EUR 680,000).
12. AOW state pension age unchanged
The AOW state pension age will remain 67 in 2026 and 2027. For 2028 through 2031, it will be 67 years and 3 months.
13. No more wage cost benefit (LKV) for older employees
As of 1 January 2026, employers will no longer receive the wage cost benefit (LKV) for hiring employees aged 56 or older. This applies to employees who entered into employment on or after 1 January 2024. For employees who started before 1 January 2024, the wage cost benefit will continue to apply.
For an overview of the (other) tax changes relating to employment and wages as of 1 January 2026, see the Tax Authority’s Payroll Tax Newsletter 2026.
Labor Provision Admission Act
In an effort to address malpractices in the temporary employment sector, particularly those affecting migrant workers, the Dutch government is set to introduce a new regulatory framework. Starting in 2026, the Labor Provision Admission Act (Wet toelating terbeschikkingstelling van arbeidskrachten - Wtta) will mandate that all temporary employment agencies obtain authorization before they can provide employees. On 11 November 2025, the Senate adopted this bill.
The Act will enter into force on 1 January 2027. Temporary employment agencies that wish to continue seconding workers must register with the Nederlandse Autoriteit Uitleenmarkt before that date. On 1 January 2028, the Netherlands Labour Authority will begin enforcement. Temporary employment agencies operating on the labor market without authorization will then be subject to fines. The same applies to hiring companies that use workers supplied by non‑authorized temporary employment agencies.
Bill to Limit the Compensation Scheme for the Transition Payment upon Dismissal Due to Long-Term Incapacity for Work
A bill has been submitted to the House of Representatives that would limit the compensation scheme for transition payments in cases of dismissal due to long-term incapacity for work. Under the proposal, only small employers - subject to certain conditions - would be eligible for compensation of transition payments. Whether an employer qualifies as large, medium-sized, or small would be reassessed each calendar year. The target effective date for the legislation is 1 July 2026.
Internet consultations
In our continuous effort to keep you informed on legislative developments, we wish to highlight the current consultation phase for upcoming legislation. This phase is an important step in the legislative process, allowing stakeholders to review and comment on proposed bills.
Draft Bill Amending the Review of Reintegration Efforts and the WIA Advance Payment Scheme: Under this draft bill, the occupational physician’s assessment of an ill employee’s work capacity will be decisive in the Employee Insurance Agency’s (UWV) review of the employer’s reintegration efforts. As a result, wage sanctions that primarily stem from medical differences of opinion between the occupational physician and the UWV insurance physician will no longer occur. In addition, the temporary waiver policy for WIA advance payments will be made permanent and given a statutory basis.
Draft Second evaluation Act WNT: This draft bill aims to enhance and streamline compliance with and enforcement of the WNT (Senior Executives in the Public and Semi-Public Sector (Standards for Remuneration) Act).
Case law
We have made a selection of the most significant recent employment law cases for employers, mainly from the following courts:
The Supreme Court (Hoge Raad)
The Court of Justice of the European Union (CJEU)
Thirteen years of temporary agency work may constitute abuse
This case concerns whether a temporary agency worker can be assigned to the same hirer for an extended period. Under the European Temporary Agency Work Directive, the temporary nature of agency work must be preserved. However, Dutch law does not set a maximum duration for agency work assignments.
The agency worker joined Randstad in August 1996. Since 2009, he has been continuously assigned to Upfield’s margarine plant. In 2021, Upfield announced that the plant would close, resulting in redundancies. Upfield agreed a social plan for its employees, which did not apply to agency workers. The agency worker maintained he had an ended employment contract with Upfield and was therefore entitled to the social plan. In court, he argued that Upfield abused the agency work arrangement within the meaning of Article 5(5) of the Directive.
The Supreme Court held as follows. According to the case law of the Court of Justice of the European Union, the Directive requires that the temporary nature of agency work be preserved. That principle applies regardless of whether there is a single continuous assignment or a succession of consecutive assignments. It must therefore be assumed that there is an abuse of the agency work arrangement if the duration of the agency worker’s assignment at the hirer is longer than what - considering all relevant circumstances - can reasonably be regarded as “temporary,” and there is no objective justification for the actual length of the assignment.
Upfield’s general need for a flexible workforce does not constitute an adequate justification, given that Upfield apparently had an uninterrupted need for the agency worker’s services throughout the period. The Supreme Court referred the case to the Court of Appeal of Amsterdam for further consideration and decision.
Practice note: This decision clarifies that a long-term assignment of a temporary agency worker to the same hirer (or a succession of assignments) can qualify as abuse. It is unsettled, however, what the consequences of such abuse are. Should it be accepted that, in such a case, an employment contract with the hirer has come into existence (as the agency worker argued here)? Or might the agency worker instead claim damages? It remains to be seen what the Court of Appeal of Amsterdam will decide.
Supreme Court: Does a Prior Employment Period Ended by the Employee Count Toward the Transition Payment When a Later Contract Ends?
When an employment contract ends, the employee is entitled to a transition payment if the termination is at the employer’s initiative or if the employer has acted in a seriously culpable manner. The payment amounts to one-third of a monthly salary per year of service. In calculating the length of service, one or more prior employment contracts between the same parties that followed each other with interruptions of no more than six months are aggregated (Article 7:673(4)(a) DCC). This case concerns whether that aggregation rule also applies when a prior employment contract was terminated at the employee’s own initiative.
The employer is an offshore company operating worldwide. The employee worked for the employer from 2011 to 2017. For family reasons and due to the lack of promotion, he resigned at the end of 2017. However, he returned to the company in early 2018. In 2023, the employer filed a petition to terminate his employment. At the Supreme Court, the employee argued, among other things, that the court of appeal erred in calculating the transition payment by not including his first period of employment, on the ground that this earlier contract had been ended at his initiative.
The complaint of the employee is premised on the view that Article 7:673(4)(b) DCC requires prior employment between the same parties to be included in the calculation of the transition payment even if that earlier contract was terminated by the employee (and there was no seriously culpable conduct by the employer). That view is inconsistent with the purpose of the transition payment and the principle that the transition payment is owed only when the employment contract ends at the employer’s initiative or due to the employer’s seriously culpable conduct. A reasonable interpretation therefore means that earlier employment contracts ended at the employee’s initiative (absent seriously culpable conduct by the employer) are not counted when determining the transition payment.
Practice note: For employment law practitioners, this case provides clarity on the scope of the aggregation rule in Article 7:673(4)(b) DCC. A prior employment period that ended at the employee’s initiative (absent seriously culpable conduct by the employer) does not count when determining the transition payment.
Supreme Court: Can an Employee Retroactively Invoke the Presumption of Working Hours under Article 7:610b DCC After Rejecting an Offer under Article 7:628a(5) DCC Covering the Same Period?
This case concerns two Dutch employment law rules. The first is the presumption of working hours under Article 7:610b DCC: once an employment contract has lasted at least three months, the agreed monthly hours are presumed to match the average hours worked in the preceding three months. The second is the duty for employers under Article 7:628a(5) DCC to offer on-call workers a fixed number of hours once the employment has lasted 12 months. That offer must be made within one month and must be at least equal to the average hours worked over the previous 12 months. The question is: if an on-call worker declines such a fixed-hours offer can they still invoke the Article 7:610b presumption with retroactive effect?
Since 2017, the employee worked as an on-call taxi driver for Taxiwerq under a zero-hours contract. In 2020, Taxiwerq twice offered the on-call worker a fixed number of working hours, which he declined. In 2021, the on-call worker invoked the presumption of working hours under Article 7:610b DCC with retroactive effect. He claimed back pay based on a working-hours volume of 42.5 hours per month. The Supreme Court ruled as follows. According to the legislative history, the legal presumption and the obligation to offer a fixed number of working hours to on-call workers coexist. Article 7:628a(5) DCC does not limit an employee’s ability to rely on the presumption of Article 7:610b DCC after declining an fixed hours offer, and it does not affect the ability to invoke that presumption with retroactive effect.
Practice note: This decision is important for employers who engage on-call workers. Even if an on-call worker has repeatedly declined a fixed‑hours offer, they can still later rely on the legal presumption regarding working‑hours.
