Netherlands labour law update 2025: what has changed and what to expect
In 2025, labour law in the Netherlands has undergone several changes. This article covers the most important changes and the legislative adjustments planned for the future.
What has changed?
Enforcement on bogus self-employment
A significant change in 2025 is an initiative to tackle bogus self-employment, which refers to situations where individuals present themselves as freelancers while there is an employment agreement. From 1 January 2025, the Tax Administration has resumed enforcement and will actively check for bogus self-employment constructions. During a one-year transition period, however, no fines will be imposed if employers and workers can demonstrate that they are taking steps to prevent bogus self-employment.
Change to the 30% ruling
A change has been announced regarding the 30% ruling. The 30% ruling allows employers to reimburse certain employees tax-free up to 30% of their salary for extraterritorial costs. From 1 January 2027, this will be replaced by a 27% ruling for employment agreements entered into after 1 January 2024. For these new employment agreements, the reimbursement will remain 30% in 2025 and 2026. After 1 January 2027, the reimbursement will be 27% of the salary. For agreements that began before 1 January 2024, the reimbursement remains 30%.
In addition to these changes, the Immigration and Naturalisation Service (IND) has introduced new income criteria for residence and work permits for foreign workers from outside the EU/EEA and Switzerland. Failure to meet the established salary thresholds will result in the foreign worker being ineligible for the required permit. This applies to both existing and future employees. Therefore, it is crucial to ensure that these employees continue to meet the specified income criteria, both now and in the future. Non-compliance may have implications for the employment and residence status of foreign workers in the Netherlands, making it essential to anticipate these changes in a timely manner and ensure compliance with the requirements.
Higher fines for illegal employment
Starting 1 February 2025, employers who hire foreign workers without a valid permit will face higher fines from the Dutch Labour Inspectorate. Companies employing workers from non-EU countries without the proper permit risk a fine of up to EUR 11,250 per person, an increase from the current maximum fine of EUR 8,000. The fine may be even higher if the illegal employment is accompanied by serious misconduct, such as the confiscation of passports or poor housing conditions. The maximum fine of EUR 11,250 applies when the violation is committed intentionally.
What to expect?
Assessment of employment relationships and legal presumption Act
In addition to the enforcement by the Tax Administration, the "Assessment of employment relationships and legal presumption (clarification) Act" is another part of the approach against bogus self-employment. This legislative proposal introduces a legal presumption for employees earning EUR 32.24 or less per hour. For employees receiving a lower rate, it is presumed that there is an employment agreement, placing the burden of proof on the employer to demonstrate otherwise.
Modernisation of non-competition clauses
Additionally, a draft bill on "Strengthening Non-competition Clauses" has been proposed to modernise the non-competition clause. Under the current regime, a non-competition clause is only valid if it is documented in writing and not unreasonably restrictive for the employee. Moreover, such a clause is generally only allowed in indefinite-term employment contracts. For fixed-term employment agreements, a non-competition clause is only permissible if there are compelling business interests, which must be substantiated in writing. The draft bill limits the duration of a non-competition clause to a maximum of 12 months and requires an explicit geographical specification. Employers will be required to provide a written justification for a non-competition clause and will be obligated to pay 50% of the monthly salary for each month the clause is in effect.
The flexible workers Act
The "The flexible workers (increased security) Act" aims to provide more stability and security for flex workers. The proposed measures include several important changes. For example, zero-hour agreements and min-max agreements will be replaced by basic agreements. These basic agreements guarantee a minimum number of hours for which employees are scheduled and paid. Additionally, a standard will be set for additional availability, meaning employees cannot be required to work outside these hours.
Furthermore, the current provisions on succession of fixed-term employment agreements will be adjusted. After three consecutive temporary agreements with the same employer, a new temporary agreement may only be offered after five years, instead of six months which is currently the case. Finally, the government also aims to improve the position of temporary agency workers.
Conclusion
Most of these plans and draft legislative proposals will be submitted to parliament this year and should go into effect on 1 January 2026. Employers are advised to prepare for these changes.
For more information on current or future labour law provisions in the Netherlands, contact your CMS client partner or these CMS experts.
