Netherlands Pledges to Build on Current Employment Reform

On 16 September 2025, the day of the State Opening of Parliament in the Netherlands, the Dutch government presented its plans for the coming year, which included a commitment to maintain its previously established course in employment law. This following article focuses on two themes relevant to employers: sick employees and the position of self-employed persons and flexible workers.

Illness and social security

A significant change is in the compensation scheme for the transition payment in cases of long-term incapacity for work. Currently, employers are required to pay a transition payment to employees when dismissed due to long-term incapacity for work. To accommodate employers, a compensation scheme was introduced so that employers would not have to bear these costs themselves. The government now intends, however, to limit this compensation to only small employers. Medium-sized and large employers  will no longer receive compensation for transition payments to long-term sick employees. The intended effective date is 1 July 2026, but the announced change still requires approval by both the House of Representatives and the Senate.

In another noteworthy development, on 18 September 2025 the Dutch parliament adopted a motion calling on the government to develop a plan for the second year of continued salary payment during illness for small employers. The plan is to replace this second year with a collective provision, which would represent a significant reduction in the burden for small employers without employees losing their rights. If implemented, this reform could fundamentally change the way illness and continued salary payment are arranged for small employers.

Clarity regarding self-employed persons and flexible workers

The government also addressed the position of self-employed persons and other flexible workers by pledging to continue with the previously announced labour market package.

An important component of this is the Assessment of Employment Relationships and Legal presumption (Clarification) Act, which will provide greater clarity on when an employment agreement exists. On 12 September 2025, the supplementary decree on clarification of the assessment of employment relationships was published for online consultation. This decree provides additional explanation regarding the two main elements by which the act clarifies the concept of "working under authority”. The decree contains various indications to help better understand the concept of authority. The aim of the act is to clarify when someone is regarded as an employee and when someone can work as a self-employed person.

In addition, the Flexible Workers (Increased Security) Act is part of the labour market package. An important objective is to provide flexible workers with greater prospects of a permanent employment agreement. The principle will be that structural work should be performed under a permanent employment agreement. Employees with on-call contracts will soon be required to receive a fixed basic contract for the number of hours they regularly work. The intention is to abolish zero-hours contracts, so that employees have greater certainty regarding their income and working hours. These changes, however, will take time to be implemented since the Flexible Workers (Increased Security) Act will enter into force on 1 January 2027.

Conclusion

Due to the outgoing status of the government, major changes in employment law have not been announced. The plans presented were already known and build on the existing course. It will be up to the new government to elaborate on these proposals after the elections. 

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