Netherlands: An Employment Overview

Dutch Employment Law in 2026 and Beyond

Developments in Dutch employment law are regaining momentum. The installation of a new government in January 2026 has raised hopes that long-shelved legislation may finally advance. This is a welcome development given that the previous cabinet achieved relatively little on employment law reform. However, as a minority coalition, the new government’s ability to deliver on its reform ambitions remains uncertain.

Meanwhile, although labour market tightness is gradually easing, technological developments and an ageing population continue to reshape the workforce landscape. Against this backdrop, employers should prepare for significant regulatory changes ahead, particularly those stemming from pending EU directives requiring Dutch implementation.

Legislative proposals – coalition agreement

The coalition agreement presented in January 2026 sets out several key labour market and social security priorities. The following proposals have been made.

Transition payment

The statutory transition payment will be reformed so as to serve its intended purpose, namely facilitating the transition from work to work. Employers who have invested in a timely and sufficient manner in retraining, upskilling and education, or who have made maximum efforts regarding re-integration obligations in case of long-term illness, will have reduced or no obligations with respect to the new transition payment. The compensation for the transition payment after two years of sickness will be abolished for all employers.

Age proportionality principle

The new government wants to weigh employees’ personal circumstances in reorganisations, alongside the age proportionality principle (afspiegelingsbeginsel).

Non-competition clause

The non-compete clause will be modernised to give employees more flexibility, as part of measures to make the transition from work to work smoother in a rapidly changing labour market.

Collective labour agreements

The government will work with social partners to modernise collective labour agreements (CAOs), broaden participation and prevent wage competition.

Pension

From 1 January 2033, the state pension age (now 67 years) will be directly linked to increases in life expectancy to keep the state pension affordable in the future. The government recognises the need to consider people in physically demanding occupations who are unable to work longer.

Unemployment benefits

The unemployment benefit (WW) will be higher during the first two months (80% instead of 75%) and shortened from two years to one year. However, the requirements for accruing entitlements and claiming WW benefits will be tightened.

Simplify leave system

The leave system will be simplified in accordance with the Social and Economic Council (SER) advisory report on balance in social leave, which is based on three pillars: childcare, care for relatives, and personal leave.

Entrepreneurship

The government wants to implement the Self-Employed Persons Act (Zelfstandigenwet) as quickly as possible, introducing new criteria for self-employment classification (see below), as well as to facilitate growth of start-ups and scale-ups by making it easier to partially compensate employees with shares (options) and expanding the possibilities to provide financially advantageous employee participation schemes.

Implementation of EU directives

Equal Pay Directive

To close the existing gender-pay gap, the EU adopted the Pay Transparency Directive. EU member states have until 7 June 2026 to incorporate its provisions into their domestic legal regulations. The Dutch government announced that the implementation deadline will not be met and will be postponed until 1 January 2027, meaning that the new reporting requirements for employers with 150 or more employees will first apply to the 2027 calendar year, instead of 2026. Implementation of the directive will take place through targeted amendments to the Equal Treatment of Men and Women Act (Wgbmv), the Works Councils Act (WOR), and the Placement of Personnel by Intermediaries Act (Waadi).

Platform Directive and European Works Council Directive

The EU Directive on Platform Work improves the working conditions of platform workers by introducing a legal presumption of an employment relationship where “direction and control” is found, requiring transparency about algorithms, and mandating human oversight of important decisions (such as dismissal). Legislation aimed at implementing the Platform Directive must be enacted by 2 December 2026.

The European Works Council Directive must be transposed into national law by 1 January 2028, which will require amendments to the Dutch European Works Council Act. No legislative proposals have been published to implement either directive yet.

AI in employment law

Artificial intelligence is increasingly influencing employment practices. One significant development is the use of algorithmic management, where AI-driven tools are behind decisions related to hiring, performance evaluation and workforce planning. While these tools can streamline traditional HR processes, they also introduce new complexities and legal questions, both from an employment and a governance and GDPR perspective. The EU AI Act, which is legally binding in the Netherlands, introduces extensive transparency and accountability requirements for using these systems, and requires that the works council be involved before such systems are created.

Employees or self-employed contractors?

The classification of working relationships has been a hot topic in the past few years. Key developments in classifying a working relationship include the following:

• Supreme Court Case Law: In answer to preliminary questions in the Uber case, the Supreme Court clarified in 2025 that there is no hierarchy among the factors for determining employment status, meaning that “external entrepreneurship” is not of lesser or secondary importance. In January 2026, the Amsterdam Court of Appeal rejected all claims brought by FNV against Uber, finding that the joined Uber drivers do not work under employment agreements due to their high degree of entrepreneurship. However, the court acknowledged that individual drivers might potentially qualify as employees, though it could not identify specific cases without individual evidence.
• Tax Enforcement: As of 1 January 2025, the Dutch Tax Authority resumed enforcement actions on pseudo self-employment. While 2025 was a transitional year, offering a “soft landing” for employers, from 1 January 2026, the Dutch Tax Authority can impose misconduct fines in cases of intentional wrongdoing. However, it will not yet impose non-compliance fines in cases of unintentional omissions.
• Legislation: The government intends to implement a legal presumption of employment based on a maximum hourly rate of EUR38 and to replace the remaining part of the Vbar (Wet verduidelijking beoordeling arbeidsrelaties en rechtsvermoeden) with the Self-Employed Persons Act, which introduces sectoral legal presumptions for high-risk sectors and an assessment committee to provide advance certainty about employment relationships. The Act also requires self-employed persons to make provisions for disability and pension.

Fundamental pension reform

The Dutch Future of Pensions Act (Wet toekomst pensioenen), which came into effect on 1 January 2023, reforms the Netherlands’ pension system by transitioning the current predominantly defined benefit framework into a defined contribution-based system, aiming for greater transparency, personal ownership and alignment with labour-market mobility. Employers must transition existing pension arrangements by 1 January 2028, which is likely to give rise to disputes and discussions among employees, dormant members, pensioners, trade unions, works councils and pension providers. Furthermore, the new government intends to freeze the pensionable salary cap at EUR137,800 until 2032, which may give rise to further legal disputes.

Relaxation of bonus cap rules in the financial sector

On 27 January 2026, the Dutch House of Representatives voted in favour of relaxing the strict bonus cap in the financial sector. Under the current rules, bonuses are capped at 20% of fixed salary for all employees, despite European regulations permitting up to 100%. The proposed amendment limits the cap’s application to “natural persons whose activities materially affect the company’s risk profile”, such as directors and higher management. This targeted approach is expected to improve Dutch financial institutions’ competitiveness in attracting IT professionals and other specialist talent.