Employment law update 2024

The new year is upon us, and that means looking ahead to developments in employment law in 2024. What changes await us? Here is a clear overview of some of the key changes.

30% ruling

If you come from abroad as a highly skilled migrant, you do not have to pay taxes over a maximum of 30% of your salary, provided certain conditions have been met. Starting 1 January 2024, a cap applies for the ruling of €233,000 per annum and the percentage level depends on how long you have used the scheme.

• In the first 20 months, a tax benefit of 30% of the salary applies;
• in the following 20 months, 20% and;
• in the final 20 months 10%.
  

The former rules continue to apply for rulings granted or requested before 1 January 2024.

Given the strong criticism that arose around changing the 30% ruling, the government has been called upon to come up with an alternative and less impacting legislation in the Tax Plan for the year 2025.

No right to work from home

In late 2023, the Dutch Senate rejected the ‘work where you want’ legislative proposal. A legally enforceable right to work from home will not come about for the time being.

However, the possibility of requesting an adjustment of the place of work, i.e. your own home, in accordance with the Flexible Working Act, will remain under the following conditions:

• you have been in continued employment with your current employer for at least six months;
• the request is submitted in writing at least two months before the intended starting date of working from home (or preferred other location);
• the request contains the where, when and how often in regards to the desired workplace.
  

The employer must decide on the request within one month (or if the company has fewer than 10 employees, within three months), after consultation with you and provide you with a written and substantiated decision. If the employer fails to do so, the request will be deemed accepted.

Legislative proposals currently under consideration

In addition, there are three employment law legislative proposals currently under consideration. These pertain to reintegration obligations in the second year of illness, flexible employment contracts, and self-employed workers.

Reintegration in the second year of illness

In the Netherlands, employers are obligated to take care of employees who are on sick leave for a duration of maximum of two years. After recovery, the employee should be able to return to their own job. For smaller companies, the burden of keeping the position of the sick employee available to them, while also needing a (temporary) replacement is heavy. The government has put forward a proposal that, in a nutshell, an employer can agree with the employee after one year of illness, then the job will no longer be kept available for the employee. Instead, the employer will help the employee find different employment outside the company.

Flexible employment contracts

The Dutch government aims for more permanent employment contracts for employees. The legislative proposal aims to ban zero-hours contracts. The interval of six months to hire someone on a temporary basis, after 3 years or 3 consecutive temporary contracts with the same employer (in Dutch: ketenregeling) is extended to five years.

Self-employed workers

There is still much debate in the Netherlands about when someone is a self-employed person or an employee. This is relevant since an employee is protected by Dutch employment law and a self-employed person is not. The legislation seeks to bring more clarity to this question of qualification of contract by incorporating the guidelines from case law into the law.

Whether the proposals will become laws is debatable. Overall, employment law experts have responded critically to the proposals separately and advised against adopting them. Moreover, a government is still to be formed and it remains uncertain how this new government will respond to the proposed bills.

Other changes

Finally, a few changes that did take effect from 1 January 2024 are:

• The maximum transition allowance that the employer has to pay you when terminating or not extending your contract is indexed in 2024 to €94,000 or, if your yearly salary is higher than €94,000 maximum one gross yearly salar;
• Minimum wage is determined by hour as of 1 January 2024. For employees older than 21 years, the minimum wage per hour is €13,27 gross;
• The state pension age changes from 66 years and 10 months to 67 years;
• The maximum amount of untaxed travel allowance increases from €0.21 in 2023 to €0.23 in 2024.

If you want to learn more about working in the Netherlands and employment contracts click here.