The Dutch labor force is well-educated and possesses numerous skills that international companies may find valuable. In 2019, the Netherlands tied with Finland for having the most digitally-skilled population in the European Union (EU). Half of the population from the ages of 16 to 74 possesses above-basic skills when it comes to the internet, computers, and software. This is notably higher than the average for the EU, which is 33 percent.
The Netherlands is the world’s second-largest agricultural exporter, but only 2 percent of the labor force works in agriculture. The country is at the forefront of several key industries, including agri-food, chemicals, energy, logistics, and high-tech systems and materials (HTSM). The Dutch financial services sector is especially notable since its assets are four times the size of the Dutch GDP.
The Netherlands is also known for having an impressively low unemployment rate. For recruiters, this means you may have fewer active job seekers and have to recruit passive job seekers on sites like LinkedIn. Or, you may need to make more of a concerted effort to get an applicant to sign on with your company since they may have other options to choose from.
The Netherlands’ official language is Dutch, a West Germanic language that is also an official language in the nations of Belgium, Sint Maarten, Suriname, Aruba, and Curacao. Some regions in the Netherlands have their own official dialects or languages, such as Frisian and Papiamento.
In the Caribbean Netherlands, the official language is English. English is also considered an official language in Amsterdam, though Dutch is still the standard for most written communications. Throughout the country, fluency in English is very common. In fact, the Netherlands ranks first on the Education First English Proficiency Index, making the Dutch the most proficient second-language English speakers in the world.
If your company communicates in English, this makes the Netherlands a desirable place to expand since you’re likely to find multilingual workers with whom you can communicate seamlessly. Note that while you may not need a translator to help with interviews or other communications with your employees, you may still need a translator to help you create official documents in Dutch.
In addition to following national employment laws, many employers in the Netherlands must also follow the terms of a collective labor agreement, known in Dutch as a collective arbeidsovereenkomst (CAO). These are sets of employment terms agreed upon by an employer or employer’s organization and one or more trade unions. Just under one-fifth of all Dutch employees belong to a trade union, and union membership is on a downward trend. However, over 80 percent of employees are covered by a CAO.
In some cases, the Minister of Social Affairs determines that an agreement applies to the whole of a certain trade or industry. This means a collective agreement could apply to your company, even if you’ve never negotiated with any trade unions. The terms of CAOs are typically reviewed every few years, and the terms may be updated.
If an employment relationship is not subject to a CAO, you should set legally compliant employment terms within an employment contract. Certain terms must be in writing, which we’ll cover later in this guide.
The law doesn’t specify what constitutes a standard workweek, but in most cases, it is 36, 38, or 40 hours. The Working Hours Act places limits on working hours, setting the maximum length for any working shift at 12 hours. Employees can work up to 60 hours in a week, but this cannot be the norm. During a four-week period, an employee shouldn’t average more than 55 hours per week, and during a 16-week period, their weekly average shouldn’t exceed 48 hours.
The Working Hours Act also requires employers to give breaks at certain intervals and sets rules for working on Sundays and other nonstandard times. Keep in mind that a CAO may set additional restrictions on working time.
The minimum amount of paid holiday leave employees are entitled to by law is four times their weekly working hours. In other words, a full-time employee who works 40 hours per week should receive 160 hours, or four weeks, of vacation leave. Unused vacation days roll over into the next year but must be taken within the first half of that year.
The Netherlands has 10 public holidays, but employers aren’t legally required to give their workers leave on these days. Some CAOs may call for certain holidays off, however.
Dutch employment law provides terms for many types of leave to help employees dealing with special circumstances. If an employee must miss work because of an illness, employers must pay at least 70 percent of their wages for up to two years. For the first year, if 70 percent of an employee’s wages fall below minimum wage, the employer must pay minimum wage. Employers must pay 100 percent of an employee’s wages if they are off due to pregnancy or birth, but this will be reimbursed to the employer through the governmental Employee Insurances Institute (UWV).