Employment law in the Netherlands is not contained under a single law. Instead it is governed by statutory regulations codified in (among other laws) the Dutch Civil Code, then furthermore governed by (among other things) in a Collective Labour Agreement (if applicable), internal regulations (if applicable) and the individual employment contract itself.
Employment law provides strong labor conditions and protections for employees, so employing people will generally be an important investment and commitment. However, options such as using Collective Labour Agreements and temp agencies are popular options for more flexible workforce arrangements. For these and many other reasons, the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Netherlands.
The official website for employment information is at the Ministry of Social Affairs and Employment.
There are several key areas to be aware of within Netherlands’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the Netherland laws and rules for both Netherland employees as well as foreign nationals.
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Employees in the Netherlands are however also entitled to several kinds of special leaves, including:
Companies entering the Netherlands can make a decision whether to use their own resources or to use a Global Employment Organization to handle employment and payroll responsibilities. A GEO solution is particularly beneficial when a company is looking to setup an office quickly with a manageable cost. The complexity of employment regulations in Netherlands makes the use of a GEO advisable to ensure full compliance with employment laws, including the drafting of local employment contracts for workers.
The company that is expanding into Netherlands contracts with the GEO to employ and payroll their staff on their behalf. The GEO then assumes the legal responsibility for these employees, sponsoring them on work permits if necessary, complying with local employment law and running their monthly payroll. This is especially useful to fulfill all of the specific withholding requirements for pensions and benefits, as well as documenting termination, probation periods and leave requests.
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