Changes in Dutch employment law 2024

Effective 1 January 2024, a number of changes to Dutch employment law has been implemented. We have listed a number of the most significant changes below.

No longer ZZP Model agreement free replacement
The model agreements based on free replacement can no longer be used to regulate the employment relationship and collaboration with self-employed workers without personnel. Effective from 1 January 2024 the Tax Authorities withdrew their consent for those model agreements. This is the result of the Supreme Court’s ruling in the Deliveroo case that free replacement might constitute working in employment. Companies using model agreements based on free replacement would do well to shortly review employment relationships and to make changes where necessary.

Minimum hourly wage
In 1969 the Netherlands introduced the statutory minimum wage, calculated by an amount per month, per week and per day. This made the amount of the minimum wage per hour (not laid down by law) conditional on the number of hours that an industry or company considers fulltime and meant that minimum wage earners working 40 hours received a lower hourly wage than their co-workers working 36 (or 38) hours a week. The introduction of the statutory minimum hourly wage on 1 January 2024 put an end to this inequality. The statutory minimum wage per day, week or month has been replaced by one uniform minimum hourly wage that applies to all employees in the Netherlands. As from 1 January 2024 the minimum hourly wage for all employees aged 21 and over will be EUR 13.27 gross.  

Maximum transition payment increased
Two factors determine the statutory transition payment usually payable to employees if the employment is terminated unilaterally by the employer: the employee’s monthly salary and the duration of the employment. The maximum transition payment is adjusted every year. As from 1 January 2024 the transition payment will be EUR 94,000 maximum gross or a gross annual salary, whichever is higher.

Untaxed travel allowance increased
Effective from 1 January 2024 the maximum untaxed travel allowance went up from EUR 0.21 per kilometre to EUR 0.23 per kilometre. Although not required by law, employers can now reimburse a higher untaxed amount.

Increase in untaxed homeworking allowance
The homeworking allowance that employers may pay employees untaxed also went up on 1 January 2024, from EUR 2.15 per day to EUR 2.35 per day.

Rise in state-pension age
The state-pension age has risen from 66 years and ten months to 67 years. After 2027 the state-pension age will go up again.

(Temporary) reduction of 30% scheme
Before, employees from outside the Netherlands did, under certain conditions, not have to pay taxes over 30% maximum of their salaries. As from 1 January 2024 the 30% scheme will be adjusted to the so-called Balkenende standard (EUR 233,000 in 2024), and the tax exemption will be phased down.  Over the first twenty months the exemption will be 20%, while over the next twenty months a 10% exemption will apply. Applications submitted before 1 January 2024 will be subject to a transitional scheme.

There is a chance that the reduction will be reversed (in part): a storm of protest has led the Upper House to ask the government to come up with an alternative that will be less unfavourable economically. The alternative plan should be integrated into the Tax Plan 2025.

Participation in pension lowered from 21 to 18 years
Under the Future Pensions Act employees can take part in a pension plan at an earlier age. Effective from 1 January 2024 the lower limit has been brought down from 21 to 18 years. This means that employers must offer appropriate pension plans to employees aged 18 and older.

Reporting obligation for work-related mobility of persons (‘WPN’)
As from 1 July 2024 employers with more than 100 employees must report to the Dutch Enterprise Agency (‘RVO’) about the commuting and business traffic of their employees. The purpose is to persuade employers to make conscious choices in favour of sustainable mobility, thus reducing greenhouse gas emissions from transport. By 30 June 2025 at the latest the data requested for 2024 must be filed. For more information we refer to our previous Alert (in Dutch): Rapportageverplichting werkgebonden personenmobiliteit (WPN) uitgesteld van 1 januari 2024 naar 1 juli 2024.

Naturally, we will keep you up to date on these and other relevant developments. If you have questions or would like to know more about a particular topic, please feel free to contact us.