1. Underestimating Sick Leave Obligations
In the Netherlands, employers must continue paying at least 70% of salary for up to two years of illness. Many international companies budget for just a few weeks of sick pay, leading to significant unexpected costs. Combined with the Gatekeeper Law obligations, non-compliance can extend this to three years.
2. Ignoring the 30% Ruling Deadline
The 30% ruling application must be submitted within four months of the employee’s start date. Missing this deadline means losing the tax benefit entirely — potentially costing thousands of euros per year per employee.
3. Mishandling Fixed-Term Contract Renewals
The Dutch chain rule (ketenregeling) automatically converts temporary contracts to permanent after three renewals or 36 months. Companies that don’t track this carefully can find themselves with permanent employees they didn’t intend to hire long-term.
4. Failing to Establish a Works Council
Companies with 50 or more employees in the Netherlands are legally required to have a Works Council. Ignoring this obligation can invalidate company decisions and lead to legal challenges from employees.
5. Applying Home Country Termination Rules
Dutch dismissal law is fundamentally different from most other countries. You cannot simply fire an employee — you need UWV permission, court approval, or a mutual termination agreement. Attempting to apply US or UK-style “at-will” termination leads to costly legal battles and settlements.
