How to Hire Remote Employees Compliantly in the Netherlands

The Netherlands is one of the countries that has been setting an example for the rest of the world regarding work-life balance. One of the most noticeable examples is the average Dutch company’s stance toward remote work and leave policies.

The respectful approach Dutch companies take toward their employees' free time isn’t surprising. The Dutch have long preferred jobs that allow them to have a lot of flexibility and good work-life balance.

Remote work offers both, and with the whole country being fast to adopt new technologies, it is also very much appreciated in the Netherlands. In fact, in 2023, over half of Dutch workers (52%) reported working from home at least sometimes.

So, if you want to hire remote employees in the Netherlands without breaking any laws, here is what you need to know.

Understanding employment laws in the Netherlands

To maintain compliance with local labor laws, you should know and understand employment law in the Netherlands. The most important fact to remember is that under the law, remote workers are treated equally in terms of both wages and benefits. The Netherlands allows no discrimination based on the work location.

Let’s discuss some basic ground rules set by employment law that you need to know before hiring remote employees in the Netherlands.

Employment law

As mentioned, in the Netherlands, employment laws apply to all workers, regardless of whether they work remotely or in an office. This means that remote employees must be treated the same as office-based staff when it comes to pay, benefits, and working conditions.

A contract is crucial when hiring remote employees. There are two main types of contracts: fixed-term and indefinite-term. A fixed-term contract is for a specific period, often used for short-term projects or temporary roles. After the contract period ends, it can be renewed or converted into an indefinite-term contract. An indefinite-term contract, on the other hand, doesn’t have an end date and is often seen as a more stable, long-term agreement.

All employment contracts must be in writing to comply with Dutch labor laws. While the contract can be written in Dutch or another agreed-upon language, using Dutch is often recommended for legal reasons.

This legal agreement should outline important details like the job title, working hours, salary, and any benefits. Having everything clearly stated in the contract helps avoid misunderstandings. It also ensures both you and your employee understand their rights and responsibilities.

Remote workers are entitled to the same wages and benefits as those working in an office. There is no room for discrimination based on whether an employee works from home or on-site. This equality in treatment ensures that remote employees feel valued and fairly compensated.

Working hours

The standard working week in the Netherlands is 40 hours, with employees typically working up to eight hours per day. The law limits work hours to 45 hours each week, including overtime. However, there are some exceptions, which are mostly based on collective bargaining agreements.

Your employees are also entitled to breaks. They are entitled to a daily rest period of at least 11 hours between work shifts and a weekly rest period of at least 24 hours.

Vacation time

In the Netherlands, full-time employees are entitled to a minimum of 20 vacation days per year, not including public holidays. This generous leave policy helps employees rest and recharge. It is, as a result, contributing to overall well-being and job satisfaction.

It’s important to give remote workers the same vacation rights as those working in the office. You should clearly communicate the vacation policy to your employees. Also, make sure remote employees feel comfortable taking time off when needed.

Benefits

Paid sick leave is a standard benefit in the Netherlands. If your employees are unable to work due to illness, you should still pay them a part of their salary. A common percentage rests around 70%, though it is subject to a few factors. The length of sick leave and payment terms will depend on the contract and the employee's tenure with your company.

Maternity and paternity leave are also mandatory benefits for employees in the Netherlands. Pregnant employees are entitled to statutory leave before and after childbirth. Fathers or partners can take paternity leave to support their family during this time. New mothers are entitled to 16 weeks of maternity leave, paid 100% of their daily salary. Fathers are entitled to two weeks of paternity leave, which is also compensated at 100% of their salary,

Finally, as an employer in the Netherlands, you are required to contribute to your employees' pensions. This applies equally to remote employees. Make sure they receive the same retirement benefits as their office-based counterparts.

Determining salary and benefits

When deciding on salary for remote Dutch employees, base it on their experience, qualifications, and industry standards. Offering a competitive salary shows you value your employees and helps you attract the right talent for the job.

It's also essential to ensure that the salary meets the Dutch minimum wage requirements. In some cases, you may need to adjust the pay to account for the cost of living in the employee’s location, ensuring they can maintain a good quality of life.

Benefits are an important part of the compensation package in addition to salary. In the Netherlands, these typically include vacation pay and contributions to health insurance. They also include retirement plans. Providing these benefits helps you comply with local laws. Conversely, it demonstrates your commitment to supporting your remote employees’ well-being.

Authorities and oversight

When hiring remote employees in the Netherlands, you have to follow rules set by several government agencies. These ensure compliance with labor laws, taxes, and insurance.

The Ministry of Social Affairs and Employment oversees labor laws. It ensures that both employers and employees follows regulations.

The Employee Insurance Agency (UWV) manages employee insurance schemes, such as unemployment and disability insurance. They provide financial support to workers when needed.

Lastly, the Dutch Tax and Customs Administration (Belastingdienst) oversees tax payments. It ensures that both employers and employees meet their tax obligations.

Tax implications of hiring remote employees

For employers, hiring remote workers in the Netherlands comes with specific tax responsibilities. You must register with the Dutch tax authorities. You also need to withhold and remit payroll taxes from your employee's wages. Lastly, you should provide annual income statements to your employees for their tax filings.

Remote employees, in turn, are required to register with the Dutch tax authorities. They also need to file annual tax returns and pay income tax based on their earnings. It’s important for both employers and employees to follow these tax rules to remain compliant with Dutch tax laws.

Understanding the Netherlands' leave policies

Since work-life balance is highly valued in the Netherlands, it’s important to understand the country’s leave policies. Here’s what you need to know:

Annual leave

Employees in the Netherlands are entitled to at least 20 days of paid leave each year. This ensures workers have ample time to rest and recharge. For part-time workers, leave is calculated based on the number of hours they work, giving them a fair amount of time off relative to their schedule.

Additionally, employees cannot convert unused leave into money unless they leave the job. This ensures that time off is more important than financial compensation.

Other leaves in the Netherlands

Since taking care of employees' well-being is key in the Netherlands, you must also be aware of other leave entitlements. These include leaves for maternity and paternity, which were already covered. But also illness and compassionate reasons. Let’s dive into what’s expected.

Short-term and long-term illness leave

When employees fall sick, you’ll need to support them with sick leave for up to 2 years. During this time, they should receive partial salary payments through Social Security. If an employee is unable to return to work after those 2 years, long-term disability leave should be available.

Compassionate leave

In the unfortunate event of a family member’s death, your employees should be able to take compassionate leave. For the loss of a spouse or partner, they’re entitled to 4 days off, while 2 days are provided for the death of a parent, child, or sibling. Make sure your policy accommodates these needs, so your employees can take time to grieve without added stress.

Implementing leave policies in a remote team

When managing a remote team from the Netherlands, ensuring that your leave policies are clear and fair is essential. It can sometimes be tricky, but it’s necessary to keep your employees happy and productive. Here’s how to put in place leave policies for your remote team effectively.

Tracking leave

Tracking leave becomes more complicated when you don't see who’s in the office daily. To manage this, you should set up a shared calendar or leave management software. This helps track absences and keeps everyone aware of who’s off, making scheduling easier and preventing any overlap in time off.

Communication challenges

Clear communication is key when managing a remote team. Make sure that everyone knows how to request leave and fully understands the rules associated with it. Communicate the process clearly so there’s no confusion about handling time-off requests.

Equal opportunity for leave

It's important to ensure that all team members have equal chances to take time off. You should implement a fair and transparent system for leave requests, allowing everyone to see how decisions are made. As a manager, you’ll need to monitor this to ensure fairness and make sure no one is overlooked.

Maintaining productivity

Keeping productivity up when someone is on leave can be a challenge, but cross-training your employees can help. You should make sure team members can step in and handle each other’s tasks. To stay organized, use project management tools to keep work on track and ensure nothing falls behind when someone is away.

Creating a leave policy document

Having a written leave policy is crucial to make sure everyone understands how things work. You’ll want to create a document outlining the leave procedures and expectations. Make sure it’s easily accessible so your team can refer to it whenever they need to.

Regular communication

You can’t just write the policy and leave it there. You must keep your team updated on any changes, which you can do during regular team meetings or check-ins. Open communication is essential in avoiding misunderstandings and keeping everyone informed.

Ensuring equal opportunity for leave

Managing leave in a remote team can be harder than in a traditional office, but it’s important to get it right. You should have a transparent process for requesting leave and set clear guidelines on how much notice is needed. Be mindful of how many people are off simultaneously so your team isn’t left shorthanded.

Maintaining productivity during leave

To maintain productivity while someone is on leave, cross-train your employees. Make sure all the tasks are assigned before the leave starts. This helps things run as usual in their absence. You can also use project management tools to keep everyone on track. This will help make sure your team is completing all the tasks on time.

By following these steps, you’ll create a system that keeps your team happy, maintains productivity, and ensures you comply with Dutch regulations.

FAQs:

Is remote work legal in the Netherlands?

Yes, remote work is legal in the Netherlands. Employers must follow the same employment laws that apply to office-based workers. This ensures equal treatment in wages and benefits.

How do I hire an employee in the Netherlands?

To hire an employee in the Netherlands, you must draft a legal employment contract. You must also register with the Dutch tax authorities and comply with labor laws on pay, benefits, and leave entitlements.

How much is the remote work allowance in the Netherlands?

As of 2024, there is no mandatory remote work allowance in the Netherlands. However, some employers provide a stipend to cover expenses like internet for remote employees.