Employee vs. contractor: how to classify workers in the Netherlands (quiz included)

Just as in nearly every other nation, when you’re hiring new team members in the Netherlands, you need to correctly classify them as either employees or independent contractors. Unfortunately, Dutch law changes frequently and can be quite vague in some areas—but that doesn’t mean you won’t face penalties for getting it wrong. 

Just ask Uber. They’ve run into similar cases in numerous countries throughout the world, and seem to be an equal opportunity offender when it comes to erroneously classifying employees as independent contractors. The Dutch government cracked down hard on them for this practice not too long ago. (And this isn’t the first time they’ve run afoul of Dutch authorities: Several years ago, they paid 2.6 million USD for a different offense.)

Misclassification is also damaging to workers, employers, and the government. Not only does it cheat employees out of benefits and protections they're entitled to under Dutch law, such as minimum wage, overtime pay, vacation pay, and employment insurance benefits, but it also harms companies’ reputations.

Learn about how to classify your workers correctly—and stay compliant with Dutch labor and employment laws—in this guide.

Table of Contents

• Classifying workers in the Netherlands
• What is an employee in the Netherlands?
• What is a contractor in the Netherlands?
• Worker classification overview: Employees vs contractors in the Netherlands
• How to classify your global workers in 90 seconds
• Tests to classify workers in the Netherlands
• Penalties for misclassifying workers in the Netherlands

Classifying workers in the Netherlands

Dutch law has different definitions for what constitutes an employee and what constitutes an independent contractor. Classifying each correctly can save you from legal trouble and ensure your business runs smoothly.

What is an employee in the Netherlands?

Unlike some other nations, the Netherlands has a rather unique way of defining who should be classified as an employee. To be an employee, you must:

• Perform your work yourself (in other words, you can’t subcontract it to someone else)
• Be paid regularly by your employer for the work you perform
• Be in a relationship with an employer where the former has, for lack of a better term, authority over some aspects of your job

• Have any of the following type of contracts:
• fixed-term contract (a temporary contract), or a
• contract for an indefinite period (a permanent contract)

Additionally, employers are well protected by Dutch law. In order to terminate an employee, the employer must get permission from the Employee Insurance Agency (UVW) or sub-district court. Furthermore, the employer is responsible for deducting taxes from the employee’s paycheck.

Dutch employees are entitled to a number of statutory benefits and protections, including: 

• Vacation entitlements
• Statutory holidays
• Paid sick leave
• Health insurance
• Long-term care
• Minimum wage
• Unfair dismissal protection

What is a contractor in the Netherlands?

The definition of “independent contractor” according to Dutch law is quite loose: Simply put, it’s a self-employed individual who enters into a fixed-term agreement with an employer to deliver a project agreed upon in their contract. Interestingly, contractors are expected to have more than one client, and they cannot have over 70% of their income coming from one employer.

Furthermore, independent contractors are not entitled to the same protections and benefits as employees. The table below offers more information on the differences between the two.