Employment law changes in the Netherlands in 2021: what’s new

This article provides a brief overview of the most important changes in employment law legislation that came into effect on 1 January this year in the Netherlands, or will come into effect in the course of this year

The maximum transition payment (the lump sum paid by employers to employees on termination of employment) has been increased from EUR 83,000 to EUR 84,000 (or a maximum of the salary over a year, if that is more). 

Compensation for the transitional payment is now also possible in the event of company closure due to retirement or the death of the director-owner. This applies to companies with fewer than 25 employees (click here for the application form in Dutch). This does not (yet) apply to the termination of a business due to the employer’s disability, but this arrangement is being worked on. 

The second period of the NOW 3 job retention scheme is starting (fourth UWV, employee insurance agency, application period), which means that employers facing at least 20% expected loss of turnover between 1 January and 1 April 2021 can apply for a concession for these three months amounting to a maximum of 80% of the wage bill, related to the loss of turnover. It is possible to apply for NOW 3.2 from 15 February 2021. For more information on NOW 3 please see our previous articles (in Dutch): 

  • This article contains general information about NOW3. 
  • This article looks at the extension of the support and recovery package in response to the second wave of infections. 
  • This article looks at the additional expansion of the support and recovery package following the imposition of the lockdown and curfew. 


From now on, on-call workers must indicate within one month whether they accept an offer of permanent employment. Previously, the period for acceptance was at least one month. From 1 July onwards, if the offer is accepted, the offered fixed scope of work must start no later than on the first day of the fifteenth month that the employee is employed. 

On the basis of the Balanced Labour Market Act (WAB), payroll workers (that is, those employed through payroll agencies) will be entitled to a so-called adequate pension scheme. 

The minimum wage increases by EUR 4.80 to EUR 1,684.80 per month for full-time employment from a minimum age of 21. This amount is adjusted twice a year. In July the second adjustment of 2021 will take place. 

The tax-free margin under the Work-related Costs Regulation (WKR) has been temporarily increased in connection with the COVID-19 crisis, as part of the government’s support and recovery packageFor 2020 and 2021, the margin is increased from 1.7% to 3% of the first EUR 400,000 of taxable salary. Over EUR 400,000, the margin remains 1.2% in 2020 and 1.18% in 2021.   

Training and retraining can now also be compensated (or provided) untaxed (as a targeted exemption) to employees after the end of their employment; until 2020 this applied only during the period of employment. For example, as part of a social plan. This is intended to make retraining easier during the COVID-19 crisis and to strengthen the labour market position of former employees. Please note that this only concerns reimbursements and provisions relating to following a training course or studying with a view to acquiring income. Nothing changes for the reimbursement of outplacement and lawyer’s fees in the context of a social plan.  

The temporary exception due to the COVID-19 crisis f