1. Legal Framework
Social security in the Netherlands is laid down in a number of laws and decrees. The social security rules can be subdivided into social insurance benefits and social welfare benefits. The difference between these two can be found in the funding. Social insurance is funded from the contributions paid by employees. This system is compulsory. All employees are automatically insured and pay a contribution. Social welfare benefits are financed from central governmental funds.
2. Required Contributions
Dutch law requires employers to make certain withholdings from the employee’s salary for income tax purposes and the employee’s national insurance contributions. An employer is furthermore required to pay certain social security premiums for its employees.
There is no obligation for the employer to provide for a life insurance policy.
4. Required Maternity/Sickness/Disability/Annual Leaves
Employees have the right to (at least) 16 weeks of maternity leave. During this maternity leave, the Employee Insurance Agency will pay 100% of the daily wage, with a maximum of the maximum daily wage. The maximum daily wage in the Netherlands is currently EUR 202,- per day.
Employers are obliged to continue to pay the salaries of sick employees for the first two years of illness. The employer is obliged to pay 70% of the employee’s salary. The salary paid by the employer during the first year of sickness cannot be less than the minimum wage. For the second year, the minimum wage lower limit does not apply.
5. Mandatory and Typically Provided Pensions
In general, an employer is not obliged to provide pension benefits to an employee unless it has promised the employee that it would provide for a pension scheme, or if a Collective Labour Agreement or government initiative requires so. If the employer has offered a pension scheme to one of the employees, it is obliged to offer the same pension scheme to all other employees.