It’s no surprise that employers want to hire employees from the Netherlands. However, it may come with some complications and challenges. To make the process easier, employers should consider utilizing an Employer of Record (EOR). Working with an EOR platform, like Borderless, makes hiring efficient, streamlines payroll, and guarantees compliance.
This article will guide you through the reasons and benefits of using an EOR to hire employees in the Netherlands.
Why Hire Talent From The Netherlands?
The Netherlands is high on the list for many companies looking to hire talent abroad. It’s turned into a hub for tech talent across Europe over the last few years, with the technology sector growing at an exponential rate.
The Dutch talent pool as a whole is highly educated. The country has high education standards and encourages vocational training as well. In addition, the Netherlands has high English proficiency, the point where English is the official co-language of the country. All of these combined are highly appealing to employers looking to hire Dutch employees.
How to Legally Hire Employees From The Netherlands
For employers looking to hire talent from the Netherlands, there are three ways to go about it:
- Hiring them as an independent contractor
- Setting up a local entity
- Going through an Employer of Record (EOR).
Hiring independent contractors in the Netherlands is not unheard of; however, it often comes with the risk of misclassification.
Setting up a local entity is a lengthy and complex process that requires local expertise and in-depth knowledge of the ever-changing labor laws and regulations.
An Employer of Record, on the other hand, makes hiring Dutch employees seamless. Aside from having a legal entity in place already, it also provides a legal framework. When hiring an employee becomes this easy, you’re able to focus on creating a positive working relationship and environment with your employees.
What Does an Employer of Record Do?
Essentially, an EOR specializes in employing people on behalf of the company. EORs take care of payroll, taxes, and benefits, ensuring that the company and the employee fully comply with all legal regulations and labor laws.
Using an EOR will significantly minimize the paperwork and processes associated with hiring employees from the Netherlands. An EOR provides an efficient and compliant way for organizations to recruit global talent and hire from abroad. It assists businesses in managing the intricacies of local labor laws and handling administration, like payroll, documentation, and adhering to tax obligations.
Contracts and Documentation
Contracts in the Netherlands must consist of specific information and there must be a clear distinction between a permanent employment contract and a temporary employment contract. Employment contracts must be provided to new hires within the first month of employment.
An EOR will take charge and handle the tedious administrative tasks involved in preparing contracts and collecting documentation. This includes, but is not limited to, employment offers, signed contracts, and banking information.
Insurance and Benefits
Using an EOR to hire employees in the Netherlands will guarantee that employees have proper insurance coverage and the necessary benefits required by local laws and regulations. This includes healthcare and pension. Additionally, as of January 2021, employers are legally required to provide an Employer Pension plan which increases an additional 15% of the employee’s salary.
An EOR will also take care of supplemental benefits for employees, like dental, vision, life insurance, and retirement savings plans. In the competitive remote work landscape, offering supplemental benefits has its advantages.
Paid Time Off, Leave, and Public Holidays
Paid time off, leave, and public holidays differ in the Netherlands from the rest of Europe. Employees in the Netherlands are entitled to 20 days of paid time off, 16 weeks of maternity leave, 7 days of paternity leave, and 9 weeks of parental leave. For sick leave, employees are entitled to 70% of their pay and it’s limited to two years. EORs will handle tracking paid time off and any type of leave and ensuring that employees are paid in compliance with Dutch regulations.
The Netherlands has 11 public holidays, however, no law states employees must have the day off. Employees working on a public holiday, or not working, are dependent on the employment contract. As of 2023, public holidays in the Netherlands are as follows:
- January 1: New Year’s Day
- April 7: Good Friday
- April 9: Easter Sunday
- April 10: Easter Monday
- April 27: King’s Day
- May 5: Liberation Day
- May 18: Ascension Day
- May 28: Whit Sunday
- May 29: Whit Monday
- December 25: Christmas Day
- December 26: Boxing Day
Tax Obligations
Employers in the Netherlands pay taxes and social security contributions based on their salary. These include pension insurance, family benefits, health insurance, maternity benefits, unemployment insurance, and professional training tax. Taxes are often the most exhausting and complex chore when hiring Dutch employees. Thankfully, an EOR takes care of all tax obligations and remittances to remain compliant with Dutch tax regulations.
Employer Responsibilities
While the EOR takes care of all legal and HR procedures, like contracts, payroll, and taxes, the employer also has some responsibilities. The employer needs to take on responsibilities as if they were hiring a local candidate. These responsibilities and tasks include recruitment, interviewing, and onboarding. Once the employee is onboarded, it’s the employer’s responsibility for maintaining the subordinate working relationship.
It’s also up to the employer to be aware of the working culture in the Netherlands. Doing so will create a positive, welcoming work environment that encourages communication and inclusivity.
Advantages of Using an Employer of Record
Using an EOR in the Netherlands will save time, reduce costs, and minimize compliance risks. Setting up an entity in a foreign country comes with a lot of stress. An EOR is already set up to hire employees abroad, making it a seamless and efficient process.
EORs have access to local knowledge and advisors with extensive experience in the Netherlands, which will only have endless benefits. Local knowledge helps employers work through the intricate HR processes and regulations in the Netherlands.
This way, employers won’t need to worry about any potential compliance and legal issues. For instance, in the Netherlands, employers must adhere to European data privacy laws, like the General Data Protection Regulation (GDPR). Using an EOR with advanced local knowledge will guarantee that your organization complies with the regulation.
Other than minimizing the stress of hiring globally, working with an EOR is cost-saving and ensures a positive employee experience with streamlined HR support.
Choosing the Right Employer of Record
When it comes to choosing the right EOR, employers must do their due diligence to find the right partner. Employers should consider various factors, such as the following:
- Experience and Expertise: When working with an EOR in the Netherlands, you want to make sure they have local knowledge of employment laws and experience in the country. Working with an EOR with a positive reputation in the Netherlands ensures compliance.
- Range of Services: Keep in mind the range of services offered by EORs and see if it’s right for you. Look for different services related to hiring staff, like administering benefits, filing taxes, compliance and governance, and legal support.
- Data Security: In a remote work environment, protecting intellectual property is vital. When choosing an EOR vendor, ensure they have a specific agreement outlining how they aim to keep sensitive information secure.
Borderless — The EOR For You
If you’re looking to hire an employee in the Netherlands, an EOR is the right solution. With Borderless, we make the hiring process a breeze. While you connect with your employees, we’ll handle logistics and administrative tasks to guarantee compliance and to make hiring a seamless, stress-free process. Our platform offers a wide range of services with extensive local expertise and knowledge.
Book a demo to see how we can streamline hiring employees from the Netherlands.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
