How to Hire in the Netherlands

Whether your business is looking to hire in the Netherlands because of a unique market opportunity, or to capitalize on a particular skill set or expertise, it’s important to understand what’s required by local laws and expected by local candidates.

Hiring in any country requires a legal entity so that the business can be properly regulated, taxed, and operated. The good news is you don’t necessarily have to establish an entity to start hiring. Businesses can leverage global PEO providers to accelerate the hiring process, while they establish their own legal entity. With so many ways to build a team, we’ve outlined some things to know about hiring in the Netherlands.

1. Use a Global PEO

When it comes to hiring in the Netherlands, one of the first decisions you’ll need to make is whether to do your own recruiting or ask for assistance. While DIY could save you money in the short term, a PEO can help with services in hiring, payroll, HR, and recruitment efforts.

PEOs can have access to databases of qualified candidates all over the world. This can help speed up the search process and hire the right person for the position. They also support you during the candidate screening to ensure your time isn’t wasted.

Hiring Dutch employees requires some sort of legal entity, and a PEO already has them established in the country. The process of setting up your own entity can take over six months. But that’s no reason to delay the hiring process. Companies can leverage a PEO while their own entities are established.

2. Leverage Online Networks

Even with a tough job market, businesses can still use online job portals to hire, as a lot of hiring now happens online.

Employers can make listings for local employees in the Netherlands using sites like Vacaturekrant, Werk.nl, Monsterboard.nl, or Nationale Vacaturebank.

Keep in mind that one of the challenges of online hiring is availability. You may not find qualified candidates in a competitive market. This is where recruitment becomes a valid strategy to lure away workers from their current positions.

That said, online advertisements can help you see what talent is available for a relatively low cost. Also consider using social media, especially LinkedIn, during your search. For personal information, the Netherlands follows the GDPR laws of the EU.

3. Provide a Great Experience

A positive working condition within your company can help you attract top candidates for your Netherlands job search. When possible, speak Dutch to your candidates, even if they know English. Unions may ask businesses to provide employment contracts in the employee’s native language.

This is not just a courtesy but a requirement in some cases.

From recruitment to onboarding, your business should have a clear structure and processes for new hires. Developing an onboarding plan will help new global employees learn the ropes and integrate with the team. This further creates a strong employment relationship.

An effective plan will start before the employee even starts their first day of work. Use technology to your advantage so you can schedule your interviews quickly and save time for other important initiatives.

Related: Maintaining company culture while growing a global workforce.

Collective Labor Agreements

Trade unions are an integrated part of the Dutch economy. Employers must adhere to the terms of a collective labor agreement, in addition to the Dutch employment law. Oftentimes employers can negotiate the terms with the trade unions before entering an agreed-upon arrangement.

Approximately 20% of Dutch workers are members of a trade union. More than 80% of Dutch workers have a labor agreement known as Collectieve Arbeidsovereenkomst (CAO).

The Minister of Social Affairs can decide if an agreement applies to an entire industry based on job conditions. This is an important distinction as your company may be part of a collective agreement by default. CAO terms are usually reviewed and negotiated every few years.

If a company is not under a CAO, it still needs to create legal employment terms in a contract with employees. This protects both the employer and employee from potential disagreements.

Working Hours

Under the Working Hours Act, the maximum workday is 12 hours and the maximum workweek is 60. However, employees cannot work the maximum hours over consecutive weeks, for instance:

· 48 hours over 16 weeks

· 55 hours over four consecutive weeks.

Having said that, most CAOs limit this to a 40-hour maximum working week. Seasonal work, peak times, and unforeseen circumstances often result in exceptions. During such exceptions, employees can temporarily work more hours per day, as needed.

The Working Hours Act sets rules for breaks working on Sundays and other nonstandard times. If applicable, review your CAO to see if any other additional restrictions apply to your business.

Time Off Requirements

An employee’s working hours are directly correlated to the paid holiday leave. Full-time employees get four times the number of days that they regularly work each week. This means an employee working 40 hours per week is entitled to 160 hours of vacation leave throughout the year.

The unused time can be carried over to the next year and must be used within the first half of the following year.

Additionally, the Netherlands has 10 public holidays. The law does not stipulate that certain public holidays are days off for employees. However, some CAOs may require employees to take specific holidays off. Furthermore, employers may pay time off to employees who are ill or pregnant. Employees with contracts receive up to two years of paid sick leave at a minimum of 70% of their wages. During pregnancy, employers pay 100% of wages, later reimbursed by the Employee Insurances Institute (UWV) from the government.

Compensation

The Netherlands uses the euro as its currency. The government changes the minimum wage rates twice a year, so it’s important to stay up-to-date on any changes. Regulations define rates in terms of daily, weekly, or monthly pay rather than hourly rates.

Just like the other sections, CAOs may determine their minimum payment rates for workers in a particular industry. Employees should check their CAO or contract for overtime rules since there are no official policies in place.

Some CAOs provide an end-of-year bonus that is as much as an extra month’s worth of pay. Dutch workers receive an annual holiday allowance usually in May. A salary agreement must include information on holiday pay when it comes to a yearly salary.

Related: Payroll tax in the Netherlands—everything you need to know.

Taxes and Social Insurances

Employers are responsible for withholding salary tax on employee paychecks as an advance payment of income tax. They also must withhold other taxes for things such as:

· National insurance

· Employee insurance

· Healthcare insurance contributions

· Pension plans

Taxes in the Netherlands pay for unemployment benefits, work and income, and invalidity insurance. The government checks these rates every two years.