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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
The D66, VVD, and CDA coalition agreement: what it means for employers
On January 30, 2026, D66, VVD, and CDA presented their coalition agreement to the House of Representatives, outlining the new government's policy agenda for the coming term. Below is an overview of the key proposed employment law measures.
It must be possible for startups and scaleups in the Netherlands to grow. It will therefore be made easier for staff to be paid partly in shares/options and the possibilities for giving employees a financial stake in companies in a tax-friendly way will be expanded.
The flat-rate tax allowance for expats will not be scaled back.
In sectors where abuse against temporary, low-paid labor migrants persists, bans on temporary agency employment will be imposed.
Employers experience the long duration and high cost of having to continue paying salary in case of sickness as a considerable burden. The coalition will therefore make the continued payment of salary in the case of sickness more workable for employers, particularly SMEs.
An ever-growing group of self-employed people is an inherent part of a modern labor market in which workers' desire for autonomy is increasing. The coalition wants to give this group the freedom and the clarity that they deserve. This will be done in a phased manner so that the timetable takes account of European obligations. The process will begin with the introduction of the legal presumption of employee status in the Employment Status Assessment and Legal Presumption (Clarification) bill (the clarification part will therefore be scrapped), together with the sectoral legal presumptions and assessment committees under the Self-employed Persons Act. The rest of the Self-employed Persons Act will be submitted to parliament as soon as possible after that.
Parliamentary consideration of the mandatory disability insurance for self-employed persons will continue, including the possibility of opting out and taking out private insurance.
More flexibility will be offered for tailored application of the age distribution principle (afspiegelingsbeginsel) in redundancy procedures, allowing greater account to be taken of personal circumstances. In this context, employers are also encouraged to modernize non-competition clauses so that employees have more freedom.
The existing transition pay scheme will be reformed so that it serves its intended purpose, namely to facilitate the transition from work to work. Transition pay will therefore be linked — in any case as regards what it can be spent on — to the new lifelong learning infrastructure. Employers who have invested in a sufficient and timely manner in upskilling and retraining or who make maximum efforts regarding reintegration will have fewer obligations, or none at all, under the new transition pay scheme. The compensation employers receive for transition pay awarded to employees who are dismissed after two years of illness will be abolished.
The unemployment benefit (WW) system will be made more activation-focused, in keeping with a new system of 'from work to work' policy and lifelong learning. Unemployment benefit will therefore be higher at the start and the payment term will be reduced to one year.
People are living longer, healthier lives. Although this is a positive development, it does necessitate sensible choices about how — and how long — we continue to work. With effect from January 1, 2033, the state pension (AOW) age will be linked directly to increases in life expectancy to keep the state pension affordable in future. Account will of course be taken of people with physically demanding occupations who are unable to continue working longer. In the next six years the tax relief for supplementary pensions for those on the highest incomes will be reduced.
The maximum daily wage will be reduced by 20% as of 2029. This measure lowers the maximum daily wage for all relevant benefit schemes by 20%, meaning that people on the highest incomes will receive lower benefits.
Working more hours should be financially worthwhile. Unorthodox measures to achieve this will be examined, such as relaxing the Working Hours (Discrimination) Act (to allow for a full-time bonus), an hour-based employment tax credit and benefits for additional hours.
It must become easier to combine work with family and care responsibilities. The leave system will be simplified.
Changes to the Dutch bonus cap in the financial sector
On January 27, 2026, the Dutch House of Representatives approved a legislative proposal introducing important changes to the Dutch bonus cap. Under the current Dutch Financial Supervision Act (Wet op het Financieel Toezicht, DFSA), a strict bonus cap applies to all persons working under the responsibility of certain financial institutions (Article 1:121 DFSA). The approved proposal significantly amends this framework. Most notably, the scope of the bonus cap will be narrowed: rather than applying to all personnel, the cap will only apply to so-called "identified staff" working for financial institutions.
The proposal brings the Dutch framework for remuneration in the financial sector more closely in line with the European standard, which already limits the applicability of bonus caps to identified staff. That said, the Dutch rules continue to apply to a wider array of businesses than European legislation prescribes, for instance, insurance companies also remain covered.
The proposal has been adopted by the House of Representatives and will now go to the Dutch Senate for review and approval. If approved, the bill will be published in the Official Gazette of the Netherlands (Staatsblad).
Learn more about the Dutch bonus cap reform in our blog post on this topic.
Implementation timeline for the EU Pay Transparency Directive
On September 15, 2025, the Dutch government announced that it is targeting a transposition date of no later than January 1, 2027 for the implementing legislation, rather than the June 2026 deadline set out in the Directive. The European Commission, however, has since indicated on December 18, 2025 that it intends to hold Member States to the original June 2026 transposition deadline. The gap between these two positions means that employers operating in the Netherlands should continue to monitor developments closely, as the definitive implementation date remains uncertain.
Mandatory anti-discrimination procedures in recruitment and selection
In 2024, the Dutch Senate rejected the Equal Opportunities in Recruitment and Selection (Supervision) Bill. On March 3, 2026, two members of parliament submitted a revised bill to the House of Representatives. The bill proposes amendments to the Working Conditions Act (Arbowet) and the Placement of Personnel by Intermediaries Act (Waadi).
The proposal requires employers to adopt procedures for recruitment and selection that promote equal opportunities and prevent discrimination. The scope of the obligation depends on the size of the employer. Employers with 25 or fewer employees are exempt. Employers with 26 to 50 employees must be able to explain their procedures. Employers with more than 50 employees must have their procedures recorded in writing or electronically. These procedures must demonstrate that recruitment and selection are based on objective, job-relevant criteria, that comparable information is obtained from candidates to allow for an objective comparison, and that the methods of assessment are relevant and transparent. The obligation also extends to employment intermediaries and temporary staffing agencies. Where applicable, the procedures are subject to the works council's right of consent under the Works Councils Act (WOR).
Enforcement will be carried out by the Dutch Labor Inspectorate, with an emphasis on supporting employers and intermediaries in achieving compliance. Fines are intended as a measure of last resort. The expected date of entry into force has not yet been announced, but a 12-month implementation period following publication of the act is anticipated. This will give employers and intermediaries sufficient time to develop their procedures and, where required, obtain works council consent.
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)
Supreme Court: deducting unemployment benefits from the so-called fair compensation (billijke vergoeding)
The Dutch Supreme Court recently addressed whether a court may take into account unemployment benefits (WW) when determining the amount of fair compensation under Article 7:671b(9)(c) of the Dutch Civil Code.
Under established case law, the fair compensation must be tailored to the exceptional circumstances of the case. Where the employer's conduct is seriously culpable, the aim is to compensate the employee for that conduct. Relevant factors include the income the employee would have earned had the employment continued, any new employment and income obtained, and income the employee can reasonably be expected to earn in the future.
The Supreme Court held that the lower court did not err in deducting the employee's potential unemployment benefits from the lost wages when calculating fair compensation. Where a court considers the consequences of the premature termination of the employment contract, it is logical to account not only for disadvantages — such as loss of income — but also for related advantages, such as entitlement to unemployment benefits or the ability to earn other income. The extent to which these factors ultimately affect the amount of fair compensation will depend on the broader circumstances of the case.
This ruling confirms that unemployment benefits may be taken into account as a mitigating factor when courts calculate fair compensation, potentially reducing the overall amount awarded. Employers facing claims for fair compensation should therefore try to present a complete picture of the employee's financial position, including any entitlement to unemployment benefits and realistic earning capacity.
Supreme Court: dismissal following a transfer of undertaking. When do ETO reasons set aside the prohibition on termination?
This case concerns the scope of the prohibition on dismissal in connection with a transfer of undertaking under Dutch law. The central question is when economic, technical, or organisational reasons (ETO reasons) entailing changes in the workforce can set aside that prohibition.
An employee worked for approximately 30 years at a Jumbo supermarket franchise, most recently for eight hours per week in an HR role. Following the sale of the supermarket to a new franchisee, she transferred to the acquiring employer by operation of law. Her specific role, however, did not exist within the new employer's broader organization. Negotiations about continuing her employment in a different position were unsuccessful, and the new employer declared her function redundant. After the Dutch Employee Insurance Agency (UWV) refused permission to terminate her contract, the employer sought judicial dissolution on economic grounds. Both the subdistrict court and the court of appeal ruled in the employer's favor, holding that the prohibition on dismissal did not apply because the employer had sufficiently demonstrated that an ETO reason had arisen after the transfer.
The Supreme Court upheld this outcome. It held that Article 7:670(8) of the Dutch Civil Code, read in conformity with Article 4(1) of Directive 2001/23/EC, does not preclude dismissals for ETO reasons entailing changes in the workforce. Crucially, such reasons must not be intrinsically linked to the transfer itself. This does not mean, however, that no connection whatsoever may exist between the transfer and the ETO reasons relied upon. The Directive aims to strike a fair balance between protecting the interests of employees and allowing the acquirer to make the adjustments and changes necessary to continue its operations. Because the employee's unique role could not be accommodated within the new employer's organization, the dismissal was held to be justified by ETO reasons that were not intrinsically connected to the transfer.
The Supreme Court appears to follow Advocate General Drijber's position in his advisory opinion that the transferred employee must be capable of being integrated into the acquirer's existing organization. The acquirer must make genuine efforts to achieve this, particularly given the statutory obligation to explore redeployment. However, it need not go so far as to restructure its organization just to allow the employee to keep performing the same duties for the same number of hours as before. For employers looking to reorganize after a transfer of undertaking, this offers some flexibility.
Institute for Human Rights: the State has discriminated against female judges through unequal pay
The Netherlands Institute for Human Rights (College voor de Rechten van de Mens) has found that the Dutch State discriminated against female judges by using "last-earned salary" as a criterion for determining their pay grade. This criterion, which had been applied since 1994, resulted in female trainee judges earning on average 3.5% less than their male counterparts. According to the Institute, the last-earned salary criterion provides insufficient room for valuing relevant work experience and says little about the value of the work performed in the new role. While the State argued that the policy was intended to attract qualified candidates and prevent a significant drop in income upon appointment, the Institute held that less discriminatory alternatives were available, such as a general salary increase or temporary pay supplements.
In addition to the collective claim, the Institute assessed three individual cases in which female judges compared their remuneration with that of male colleagues. In all three cases, the male colleagues were found to receive higher salaries without this being justified by objective criteria such as knowledge or experience. In one case, a male colleague earned nearly EUR 1,915 gross per month more than his female counterpart for equivalent work, despite having virtually the same professional experience. The Institute concluded that these individual cases also constituted gender-based discrimination.
The State has since responded by adopting a new grading and remuneration policy in July 2024, retroactively abolishing the last-earned salary criterion as of July 2023. The Institute's rulings are not legally binding, meaning the State cannot be compelled to pay compensation. The Institute does, however, expect the State to explore options for financially compensating the affected female judges.
These rulings underscore that using an employee's last-earned salary to determine pay in a new role can constitute indirect gender discrimination. Employers should review their remuneration policies to ensure that pay decisions are based on objective, job-related criteria such as the nature of the work, required qualifications and relevant experience. With the EU Pay Transparency Directive due to be implemented into Dutch law, scrutiny of pay practices will increase. Employers are well advised to conduct internal pay audits, address any unjustified disparities, and document the objective criteria underpinning their compensation decisions.
