Hiring options
Netherlands
Employee
Employment agreements can be entered into for either a fixed or an indefinite term. Fixed-term employees may gain an indefinite employment status after a certain time (maximum of 3 years and 3 fixed term contracts) and cannot be discriminated against due to their fixed term status. In terms of scope, employment agreements can be full-time, part-time, zero-hours or on-call. With regard to on-call employees and employees with zero-hour contracts, it is mandatory to offer a contract with a fixed number of hours after such employees have been employed for at least 12 months. This is a recurring obligation.
Independent contractor
With regard to independent contractors, there are no limitations imposed by law and thus no maximum term for hiring an independent contractor. However, there is a risk of bogus self-employment / legal reclassification of an independent contractor relationship as an employment relationship. The terms and conditions agreed in the contract as well as the actual circumstances under which the contract is conducted are decisive in regard to the question of whether the work relationship should be considered an employment relation.
- The work must be performed in person
- Salary is paid and
- There is a relationship of authority between the individual and the company.
It is important to assess up front if the contract is in fact an employment contract "in disguise." If, based on the facts, this appears to be the case, the independent contractor should be regarded as an employee – so all employee and dismissal protections will apply – and Dutch wage tax and social premiums will be due.
To limit the tax and social security risk, parties may use model agreements, published on the website of the Dutch tax authorities, or submit the contract to the Dutch tax authorities to receive confirmation on the qualification of the contract in a ruling. If Dutch tax authorities confirm the absence of an employment relationship in a ruling, they can, in principle, not recover wage tax and social premiums from the company with respect to that contract.
The Dutch government introduced an online tool with regard to the legal classification of independent contractors: the Web Module for Assessment of Employment Relationships. The Web Module is an online questionnaire which companies can use to obtain clarity about whether an assignment can be carried out by a contractor instead of an employee. The Web Module will provide 1 of the 3 possible outcomes: ‘contractor’, ‘employee’ or ‘no judgement possible’. The Web Module does not yet have legal status, but the outcome of its assessment may be used by companies to review – and reconsider – their working relationship with contractors.
Agency worker
Agency workers are common and cannot be discriminated against due to their status.
Employees who are placed in the organization through a payroll-provider/employer of record (PEO) are entitled to terms of employment that are equal to the terms of employment of “regular” employees of the organization – or terms of employment that are in line with industry / common practice, if there are no regular employees within the organization.