Netherlands Employment Legislation Changes 2024
Businesses in the Netherlands will need to be ready to implement these new regulations for their employees in 2024
In this article, we will delve into the 2024 Employment Legislation Changes for Employers in the Netherlands. Let’s understand the key updates and amendments in labor laws that are expected to impact employers across various sectors. Join us as we explore what employers need to know to stay compliant and adapt to the evolving regulatory environment in the Netherlands.
Changes to ZZP Model Agreements
From January 1, 2024, the use of model agreements based on free replacement for self-employed workers (ZZP) without personnel is no longer permitted. These model agreements allowed businesses to contract with self-employed individuals/freelancers without withholding payroll taxes.
Introduction of a Statutory Minimum Hourly Wage
The Netherlands has standardized the minimum hourly wage to address disparities caused by varying full-time hour standards across industries. Starting July 1, 2024, the minimum hourly wage for employees aged 21 and over is set at €13.68 gross. This replaces the previous system based on monthly, weekly, or daily wages which proved to be unfair to those employees working a more number of hours per day or week.
Increased Maximum Transition Payment
The statutory transition payment (usually payable to employees if the employment is terminated unilaterally by the employer), calculated based on an employee’s monthly salary and duration of employment, has been updated. As of January 1, 2024, the maximum transition payment is EUR 94,000 gross or a gross annual salary, whichever is higher.
Enhanced Untaxed Travel Allowance
Effective January 1, 2024, the untaxed travel allowance for employees has increased from EUR 0.21 to EUR 0.23 per kilometer. Although this is not a mandatory reimbursement, employers can now provide a higher untaxed allowance for travel expenses.
Increased Untaxed Home-working Allowance
The untaxed home-working allowance has also risen from EUR 2.15 to EUR 2.35 per day as of January 1, 2024. This allowance helps cover additional costs incurred by employees working from home, such as utilities and office supplies.
Adjustments to the 30% Ruling Scheme
The 30% ruling, which allows certain foreign employees to receive 30% of their salary tax-free, has been modified. From January 1, 2024, the tax-free percentage will be gradually reduced: 20% for the first 20 months and 10% for the next 20 months. Additionally, the scheme will now be capped at an annual income of EUR 233,000. A transitional scheme applies to applications submitted before this date.
Rise in State-Pension Age
The state-pension age has increased from 66 years and ten months to 67 years as of January 1, 2024. Further increases are expected after 2027.
Lowered Age for Pension Participation
Under the Future Pensions Act, the minimum age for pension plan participation has been lowered from 21 to 18 years. This change, effective January 1, 2024, requires employers to offer pension plans to employees aged 18 and older.
Highly Skilled Migrants: Updated gross monthly salary thresholds for 2024:
Each year, the Dutch government updates the gross monthly salary thresholds. Effective January 1, 2024, the new thresholds for Highly Skilled Migrants will be as follows, excluding the 8% holiday allowance. These changes apply to applications submitted after January 1, 2024. Existing Highly Skilled Migrants on payroll with a valid residence permit are not affected by this adjustment.
- Age Over 30 years: EUR 5.331
- Age Under 30 years: EUR 3.909
- During and after the search year: EUR 2.801
Registration of Carbon Emissions
These updates mark significant shifts in Dutch employment legislation for 2024, impacting both employers and employees. Staying informed and compliant with these changes is essential for all businesses operating in the Netherlands.
How Beyond Borders HR Can Help You
These 2024 employment legislation changes for the Netherlands can be challenging for employers to process independently. Beyond Borders HR, a global HR consulting firm, stands ready to assist businesses in understanding and implementing these changes effectively. With our extensive expertise in global HR practices, we ensure that your organization stays compliant with the evolving regulatory landscape. Reach out to Beyond Borders HR for tailored solutions, expert guidance, and seamless integration of these legislative updates into your HR policies and practices. Our team is dedicated to empowering your business with the knowledge and support needed to thrive in this dynamic regulatory environment.
