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Welcome to our quarterly employment law update. This update contains a selection of the most important employment law developments in the Netherlands, with respect to legislation and case law.
Legislation
Budget Day (Prinsjesdag)
On September 25, 2026, the Dutch government presented its annual Budget Day proposals. Below is an overview of the most significant proposed changes for employers arising from the 2026 Budget Memorandum (Miljoenennota) and the 2026 Tax Plan (Belastingplan). For further details on the tax-related changes, please refer to our blog post.
Unemployment Insurance Act: The proposed reduction of the maximum duration of unemployment benefits from 24 to 12 months has been postponed by one year, to January 1, 2029. The remaining unemployment insurance measures set out in the coalition agreement, including stricter qualifying requirements, an increased benefit level during the first two months, and a slower accrual rate, remain unchanged and will be implemented from 2030.
Self-Employed Persons Act: The government aims to submit the Self-Employed Persons Act to the House of Representatives before summer 2027. A public internet consultation on the draft act opened on October 1, 2026.
Abolition of transition payment compensation: The measure to abolish the employer compensation scheme for statutory transition payments, originally set for January 1, 2027, has been delayed by one year. The new effective date is January 1, 2028.
Maximum daily wage: The coalition agreement measure to reduce the maximum daily wage by 20% has been withdrawn entirely.
Tax-free commuting and remote work allowances: The maximum tax-free commuting allowance will be increased retroactively as of January 1, 2026, from EUR0.23 to EUR0.25 per kilometer. The remote work allowance is expected to rise from EUR2.45 to EUR2.50 per day worked from home.
Staff discount exemption: The targeted tax exemption for industry-specific products currently allows employers to offer tax-facilitated staff discounts on their own products. The government proposes to abolish this exemption.
Startups and scaleups: The bill on fiscal incentives for startups and scaleups has been submitted to the House of Representatives. The bill aims to make employee stock options more tax-efficient by introducing a 65% reduction of the taxable base for stock option rights and deferring the taxable moment to the point at which the underlying shares are sold.
Pensions update
The Budget Day proposals also included a freeze of the pension accrual cap. Pension accrual is currently capped at an income level of EUR137,800 (2026 level). The government proposes to freeze this cap, by suspending indexation for six years, keeping it at its current level through 2032. Since the AOW-offset is not freezed and will increase each year, the amount of pension accrual will decrease for employees who earn or will earn more than EUR137,800.
More Security for Flexible Workers Act adopted
On July 7, 2026, the Dutch Senate adopted the More Security for Flexible Workers Act. The key changes are set out below.
Successive fixed-term contracts: The required break period for resetting the chain of successive fixed-term employment contracts will be extended from 6 to 36 months. The general option to derogate from the chain provision rules by collective bargaining agreement will be abolished. However, in the context of successive employment, derogation from the maximum number of contracts will remain permitted.
On-call contracts: Going forward, employment contracts must stipulate a minimum number of working hours greater than zero. As a result, zero-hours contracts will, in principle, no longer be permitted. The act introduces so-called bandwidth contracts. The bandwidth between the guaranteed minimum number of hours and the maximum may not exceed 30%. Exceptions apply for minors, school pupils, students and persons who have reached state pension age.
Temporary agency work: Phase A will be limited to a maximum of 52 weeks. It will no longer be possible to extend this period by collective bargaining agreement. Phase B will be subject to a stricter chain provision, with a maximum duration of 24 months and a maximum of six contracts. In addition, the equal treatment obligation under Article 8 of the Placement of Personnel by Intermediaries Act will be tightened: agency workers must receive employment conditions that are at least equivalent to those of employees hired directly by the client company. Furthermore, the prohibition on the use of replacement workers during strikes will be extended. This prohibition will no longer apply only to the temporary employment agency, but also to the client company.
The provisions on equivalent employment conditions for agency workers will enter into force on December 31, 2026. The remaining provisions will take effect on January 1, 2028.
Bill to amend the assessment of reintegration efforts and WIA advance payment scheme submitted to the House of Representatives
On August 31, 2026, this legislative proposal was submitted to the House of Representatives. The bill aims to make the sickness and disability benefits system more practicable, clearer, and simpler. The company doctor's assessment of a sick employee's remaining capacity will become leading in the Employee Insurance Agency’s (UWV) evaluation of the reintegration efforts. As a result, an employer can no longer receive a wage sanction because UWV's insurance physician retrospectively reaches a different opinion on the employee's medical capacity than the company doctor. UWV will, however, continue to assess whether the employer and employee have made sufficient efforts toward reintegration.
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.
The most relevant draft bills that were opened for consultation:
Draft Self-Employed Persons Act:The government intends to clarify when a person is working as a self-employed individual. To this end, two tests will be introduced: the self-employment test and the working relationship test. If both tests are met, there is (in any event) no relationship of authority. Consequently, there is no employment contract, and the person can work as a self-employed individual.
Draft Leave Act: The government intends to restructure the leave system around three pillars: (i) leave related to the birth of and care for children; (ii) leave for the care of close relatives; and (iii) personal leave. The duration of leave entitlements and the level of benefits will remain unchanged.
Normally, our Quarterly Insights focus primarily on case law from the highest courts. However, during the summer period, little relevant case law was published. For this reason, we have compiled a selection of recent lower court decisions on sickness, reintegration, and mediation.
Wage suspension justified where sick employee refuses mediation
An employee joined her employer as a psychologist under a permanent employment contract. A dispute arose, in part over the calculation of her salary. The company doctor recommended mediation as a necessary step in the reintegration process. However, the employee continued to impose conditions on her participation in mediation and ultimately refused both direct contact and mediation altogether. In response, the employer applied a wage suspension. Several weeks later, the employee unconditionally agreed to mediation and wage payments resumed. The mediation, however, did not resolve the dispute. The employee subsequently requested the subdistrict court to dissolve the employment contract and sought a transition payment, an equitable compensation, back pay, and reimbursement of training costs.
The subdistrict court held that the ongoing disagreement had disrupted the employment relationship to such an extent that it should be terminated in the near term. The court therefore dissolved the employment contract. However, the court found that the employer had not acted in a seriously culpable manner. While the employer had initially made errors in the salary calculation - which were only corrected after the employee and other staff members raised the issue - those errors had since been remedied through recalculations and back payments. On the wage suspension, the court noted that the employee should have submitted an expert opinion from the UWV addressing whether she had met her reintegration obligations during the relevant period. On the merits, the court also considered the wage suspension to be justified. The company doctor had recommended mediation as a necessary step in the reintegration process, but the employee had refused to participate without valid grounds. Only at a later stage did she unconditionally agree to mediation, at which point wage payments were resumed. The requested transition payment and equitable compensation were accordingly denied.
Practice note: This case illustrates that a company doctor's recommendation to initiate mediation is not without consequences. If an employee refuses to participate, or only agrees to do so on unreasonable terms, wages may be suspended. Employers therefore have a meaningful tool to break through this type of deadlock.
Wage suspension not justified for sick employee who would only cooperate with reintegration through mediation
An employee at a law firm became involved in a conflict with a colleague. She informed her employer that she felt she was being held responsible for the dispute. The following day, she called in sick. Shortly afterward, she reported that her trust in her manager had also been seriously damaged. The company doctor recommended that the parties hold discussions. The employee, however, was only willing to participate in these discussions within the framework of mediation, citing concerns about confidentiality. The employer rejected this request and suspended her wages. The employee claimed continued payment of wages and sought an order requiring the employer to participate in mediation.
The subdistrict court ruled that there had been no refusal to cooperate with the company doctor's advice, nor any obstruction of recovery. The company doctor had given the parties discretion over the format of the discussions but had expressed a preference for involving a mediator. The employer failed to provide an adequate explanation as to why confidentiality would pose a problem. In addition, the employee offered sufficient justification for wanting a discussion leader who is not a current or former attorney, given that she herself works at a law firm. The wage suspension was therefore found to be unjustified, and the wage claim was granted. However, the court declined to order the employer to participate in mediation, since mediation is, in principle, a voluntary process. The employer was ordered to pay the legal costs.
Practice note: In this case, unlike the ruling discussed above, it was the employee who would only engage with the employer through mediation. The employer was reluctant to do so. The court held that the employee's stance was not a valid reason to suspend wages. It did rule, however, that mediation is in principle a voluntary process and that the employer cannot be forced to participate. This appears contradictory, and begs the question: how voluntary is mediation, really?
Employee's participation in Hyrox during sick leave for mononucleosis results in valid summary dismissal
The employee joined the employer on January 1, 2025. On February 10, 2026, the employee reported sick due to tensions in the employment relationship. A month later, she informed the employer that she had been diagnosed with Pfeiffer's disease (mononucleosis) along with a severe throat infection, rendering her unable to work. She stated that even minor physical exertion left her fatigued. Nevertheless, on March 27, 2026, the employee participated in a Hyrox fitness competition. When the employer confronted her, the employee responded that exercise is healthy. On April 3, 2026, the employee was summarily dismissed. The employee challenged the dismissal on two grounds. First, she argued that there was no urgent cause for dismissal, as she had reported sick due to workplace tensions, not because of the mononucleosis. Second, she contended that it is the company doctor, and not the employer, who determines whether an employee is ill.
The subdistrict court ruled as follows. The basis for the dismissal was neither the workplace tensions nor the question of whether the employee was physically capable of participating in the Hyrox. Rather, the dismissal was grounded in a breach of the employer's trust. The parties had previously discussed rebuilding mutual trust in order to address the tensions experienced by the employee. On April 1, 2026, the employer learned that the employee had competed in a Hyrox event, despite having reported just two weeks earlier that she was suffering from mononucleosis and that even minor physical exertion was too much for her. It was precisely the collapse of that trust, resulting from the employee's inaccurate representations regarding her capacity, that constituted the reason for the termination. The subdistrict court found it understandable that the employer lost all confidence in further cooperation upon learning of the employee's participation in a Hyrox event. The court therefore held that there were sufficient grounds for summary dismissal. The employee does, however, retain her entitlement to the statutory transition payment.
Practice note:In practice, disputes frequently arise between employers and employees on sick leave regarding the extent to which the employee is able to perform work. Where an employer has doubts, it generally cannot impose disciplinary measures on its own. The employer will need to seek the company doctor's assessment of the employee's capacity. What makes this case notable is that the dismissal was not based on whether the employee was actually ill, but on the breach of trust: participating in a Hyrox competition was irreconcilable with what the employee herself had reported about her condition.
Guidelines on the application of the EU Forced Labor Regulation
On June 26, 2026, the European Commission published guidelines on the application of the EU Forced Labour Regulation (Regulation (EU) 2024/3015), which prohibits products made with forced labor from being placed on the EU market. The guidelines are addressed to the competent authorities responsible for enforcing the regulation, as well as to customs authorities, market operators, consumer organizations, civil society organizations, trade unions, and all other stakeholders. They are intended solely as guidance; only the text of the regulation itself is legally binding.
The guidelines cover the following topics:
Scope of the regulation, including a definition of forced labor and examples of the types of forced labor covered;
The investigation process;
Enforcement and sanctions;
Guidance for market operators on due diligence with respect to state-imposed forced labor;
Submitting information on potential violations of the forced labor prohibition.
Further information on the prohibition of products made with forced labor is available on the European Commission's Forced Labor Single Portal.
