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A guide for navigating work contracts in the Netherlands

Updated: Jun 28

Navigating the Dutch job market can be daunting, especially when it comes to understanding work contracts. As an employee in the Netherlands, it's important to know your rights and obligations under Dutch labor law. This includes knowing about terms such as ADV days, holiday days, and what to do in case of dismissal.

Luckily, there are resources available to help you understand Dutch work contracts. By educating yourself on the basics, you can ensure that you are getting a fair deal and are protected by Dutch labor laws. Here's a guide to help you get started.


Woman explains Dutch work contracts to other woman in the workplace

Contents


What is a CAO/CLA?

If you work for a Dutch employer, your contract is subject to the Dutch employment law. In addition to this, some companies also participate in a Collectieve Arbeidsovereenkomst – CAO (Collective Labour Agreement). A CLA is a written agreement between an employer and its employees which covers working conditions and benefits – these are usually more favourable for employees than the ones prescribed by law. A company can have its own labour agreement or can be a part of an industry labour agreement. Everything in your contract must be in accordance with the CLA and if you have any doubts about your rights or responsibilities, this is a one-stop-shop you should check. If your future employer has no CLA, you will need an individual agreement where you negotiate the working conditions.


The difference between a temporary or permanent contract and a contract with a recruitment agency.

A temporary or definite term contract means that there is a start and an end date for your employment. A permanent or indefinite contract means that the end date is not specified. As of January 1st 2020, you have a right to a permanent contract after 3 years of working for the same employer or 3 definite contracts, unless stated differently in the Collective Labour Agreement.

Bear in mind that the permanent contract cannot be offered if the interval between two temporary contracts exceeds 6 months. Working through an agency means that you will perform a job for a certain company, but you sign the contract with an agency that is your legal employer. In this case, you can have more than 3 contracts and not be entitled to a permanent one. This is because you can work on short-term projects and have temporary contracts of just a few weeks. You will usually have an extensive talk with the administrative staff of your agency before signing anything. They will explain to you everything you need to know about your rights and obligations as a temporary worker. An agency can also represent you in talks with a potential employer where you sign a contract directly with a company, but your agency recruiter can negotiate things for you.


Is there a trial period?

​The trial period depends on the length of your contract. If the contract is 6 months or less, then there is no trial period. If a contract is between 6 months and 2 years, the trial period is usually 1 month. Contracts longer than 2 years can have 2 months probation period. The trial period gives you and your employer enough time to assess if this job is the right fit for you. In most cases, you will receive feedback from your manager after the first month and find out whether your contract will continue. This is also an important period for you to feel the company culture, get a sense of your daily tasks and check how well you get along with your colleagues.

Hours in a full-time job


It is important to clarify the number of working hours per week in your contract. In the Netherlands, full-time employment is recognized as between 36 to 40 hours per week by law. Your salary and number of holiday days will depend on the number of hours you work, so it is important to have a clear understanding before signing your contract.


Salary


Starting from 1 July 2023, the Netherlands sets the baseline monthly salary at €1,995 before deductions for individuals aged 21 and above. Meanwhile, the mean yearly salary stands at around €3,333 before any deductions. Keep in mind, these figures represent gross incomes. Of course, the actual amounts can vary considerably based on factors like years of professional experience, specialized skills, industry expertise, and job sectors. Additional insights can be explored in our informative blog article: 'Unraveling Dutch Salaries - What's a Fair Income?'


Holiday Allowance


Trace back to the 1920s, and you'll find the origins of holiday allowance - an extra payout bestowed by employers on top of your annual earnings. Initially designed as compensated time off, this practice evolved in the 1960s to become an additional annual sum, catering to the escalating costs of travel.


The base standard is 8%, a mandated offering from employers. This usually arrives as an extra disbursement in May or June, just prior to the vacation season. Yet, a twist exists: some individuals lean towards sprinkling this sum throughout the year, integrating it into their monthly wage rather than receiving it en bloc. If your earnings exceed 3 times the minimal wage, your employer might extend a contract sans holiday allowance or with a trimmed offering. And in times of illness or leave, expect a proportionately lower holiday allowance. The pivotal query: Does your forthcoming contract's gross salary encapsulate the holiday allowance? Always inquire!


Dutch Public Holidays 2023

  • New Year's Day: 1st January

  • Easter Sunday: 9th April

  • Easter Monday: 10th April

  • King's Day: 27th April

  • Liberation Day (every 5 years*): 5th May 2025

  • Ascension Day: 18th May

  • Whit (Pentecost) Sunday: 28th May

  • Whit (Pentecost) Monday: 29th May

  • Christmas Day: 25th December

  • Boxing Day (2nd day of Christmas): 26th December


*Please note that Liberation Day is a public holiday every 5 years, and whether or not you have that day off this year depends on your employer.


How many Holidays will I have?


Setting the baseline, the Netherlands mandates a minimum of 20 vacation days for full-time roles. But stepping up the ladder, the average stands at 25 days of annual respite. The twist lies in the tail: should you not exhaust all your vacation days within the calendar year, you can ferry a maximum of 5 days into the following year; otherwise, they dwindle into oblivion.

Public holidays occupy the realm of non-working days for the majority. Yet, it's vital to note: there's no legal decree that compels employers to grant you a day off on these public holidays. Ergo, in specific domains like horeca and tourism, these days might seamlessly transition into working days as well.


What are ADV and ATV days?


In the Netherlands, in addition to holiday days, employees may also have what are called ADV (ArbeidsDuurVerkorting), ATV (Arbeidstijdverkorting), or roostervrije days. These are essentially extra days off that an employer may offer to their employees.

The idea behind ADV/ATV days is to shorten the workweek of individual employees so that companies can hire additional staff and create more jobs. However, as with holiday days, employees are not automatically entitled to these additional days off unless there is an agreement in place.

It's important to note that ADV days cannot be carried over to the next year. If an employee does not use them within a given year, they will be forfeited. Additionally, an employee may also be entitled to ADV hours, which means that their working hours are decreased by one or more hours per week. However, this is entirely at the discretion of the employer and is not a mandatory regulation.


Will the employer pay my travel expenses?


In the Netherlands, many employers offer travel reimbursement to their employees to cover the cost of commuting to and from work. The amount of reimbursement can vary depending on the Collective Labor Agreement (CLA) of the employer. Typically, if you live more than 10km from your workplace, you may be eligible for reimbursement of €0,21 per kilometre. This can be used to cover the cost of public transportation or expenses related to using your own vehicle.


It's important to note that if you use your own car, the reimbursement may not cover parking costs, so be sure to clarify this with your employer. Some employers may offer a higher or lower reimbursement rate than the standard €0,21 per kilometre, or they may incorporate the reimbursement into your monthly salary rather than paying it separately. Make sure to ask about the travel reimbursement policy when negotiating your contract to avoid any misunderstandings.


What are the common secondary benefits in the Netherlands?


Additional benefits are becoming increasingly popular in the Netherlands as companies try to attract the best talent. These benefits can range from free coffee and tea in the office to more significant perks like additional payment towards health insurance, a gym subscription, monthly and yearly bonuses, unlimited vacation days or a 13th salary.

It is important to have a clear understanding of your base salary and any additional benefits that are included in your contract. If you entered the Netherlands with an orientation visa, you may be eligible for the 30% tax ruling. This is a benefit that is certainly worth discussing with your future employer.

Remember to ask questions and negotiate before signing any contract to ensure that you are getting the best possible deal.


What if I get sick or pregnant?


In the Netherlands, there are laws in place to protect employees who are sick or injured. If you become sick or injured, your employer cannot dismiss you during the first 2 years of your absence. During this time, you will receive 70% of your salary. If you are still unable to work after 2 years, you may be able to work reduced hours or have different responsibilities. If that is not an option, you can apply for disability benefits.


If you are expecting a child, you are entitled to at least 16 weeks of paid maternity leave. During this time, you will receive 100% of your salary. Additionally, there are laws in place to provide partner leave and parental leave to parents. Both parents are entitled to take unpaid parental leave until their child is 8 years old. This leave is calculated as 26 times the number of hours you work and can be used all at once or spread across multiple years.


Many employers in the Netherlands also offer additional benefits to their employees such as free coffee, tea, and fruit in the office, gym subscriptions, and bonuses. Make sure to discuss all of the benefits available to you with your employer when negotiating your contract.


How long is the notice period?


The notice period is an important aspect to consider when changing jobs in the Netherlands. It varies depending on the type of contract you have and the duration of your employment with the company. If you are on a probation period, you can resign immediately and your employment will end right away. However, if you have been working for the same employer for more than 5 years, your notice period will be 2 months and it will increase by a month with every additional 5 years of service.

The employer is also required to give you a notice period before dismissing you, which typically ranges from 1 to 4 calendar months. However, in certain circumstances such as fraud, stealing, serious lack of skills, or refusing to work without a good reason, an employer can dismiss you on the spot without a notice period. In such cases, you will not be entitled to unemployment benefits and your salary may be stopped immediately. So, it's important to understand your rights and responsibilities related to notice periods when entering into a new job agreement.


What should I do in the case of dismissal?


Under Dutch law, if your employment is terminated, you may be eligible for unemployment benefits as long as you meet certain criteria. This includes being a legal resident of the Netherlands, having worked for at least 26 weeks in a 36-week period prior to becoming unemployed, and not being at fault for the unemployment.

The length of time that you can receive unemployment benefits is based on your employment history, with each year of work entitling you to one month of benefits. The minimum amount of time is 3 months, and the maximum is 24 months.

In addition to unemployment benefits, you may also be entitled to a transition payment, which is a one-time compensation payment based on your monthly salary and length of employment. As of January 1st, 2020, employees who have worked for their employer for at least 6 months are eligible for a transition payment. It's important to note that these benefits and compensation can vary based on individual circumstances, so it's always a good idea to check with the Employee Insurance Agency and/or a legal professional for specific information.


What is a non-competition clause?


Many employment contracts in the Netherlands include a non-disclosure clause or geheimhoudingsbeding, which prevents employees from disclosing confidential information about their employer or clients. This includes trade secrets, business strategies, and any other sensitive information. The clause can remain in effect even after you leave the company, so it's important to be aware of what you can and cannot share. Violating this clause can result in legal consequences, so make sure to read it carefully before signing your contract.


What is GDPR?


The General Data Protection Regulation (GDPR) is a regulation in the European Union that sets guidelines for the collection, processing, and storage of personal data. It was implemented in May 2018 to protect individuals' data and privacy. Under GDPR, organizations that collect personal data must ensure that the data is used lawfully, transparently, and for a specific purpose. It also grants individuals the right to access, correct, and erase their personal data. The regulation applies to all businesses operating within the EU, as well as those outside the EU that offer goods or services to EU citizens.


Will I have a right to a pension?


In the Netherlands, all legal residents who reach the retirement age are entitled to the basic state pension. The retirement age is currently set at 67 years for both men and women. Once retired, you will receive a basic pension income provided by the General Old Age Pension Act (Algemene ouderdomswet or AOW). The amount you receive will depend on your age and living conditions, with a guaranteed pension of €1,353.11 gross per month for individuals and €920.98 for couples. Note that a 2% deduction applies for every year spent abroad between the ages of 15 and retirement.


In addition to the basic state pension, you may also receive an additional income from pension plans provided by your previous employers. Keep in mind that not all employers offer a pension plan, although some industries have mandatory pension schemes. You can also opt for private pension insurance, which involves paying a regular amount during your working years to receive payment upon retirement.


Keypoints


When entering into a job contract in the Netherlands, it's important to consider the Collective Labor Agreement (CLA) your employer has in place, as it can impact various aspects of your employment such as holiday days, allowances, and more. If you're hired through an agency, they will likely explain these details to you, but if you're hired directly, it's important to clarify everything before signing the contract. Here are some key things to clarify:

  • The duration of your contract and whether it includes a probationary period

  • Your base salary, whether it's monthly or annual, whether it includes holiday pay, and if you're eligible for bonuses

  • The number of vacation and ADV days you're entitled to

  • Whether you'll have time off on public holidays

  • Whether you're eligible for a travel reimbursement

  • The terms of the non-competition clause

  • Additional benefits such as a pension plan and health insurance contributions

Now that you have a better understanding of the employment landscape in the Netherlands, it's time to start your job search!











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