Budget Day 2026: what do the plans mean for employers

On Tuesday, 15 September 2026, the Dutch government presented its Budget Memorandum and budget for 2027. From an employment law perspective, it is particularly noteworthy that several previously announced measures have been postponed or scrapped. At the same time, a significant amount of legislation with direct implications for employers is planned for the coming years. We have summarised the key developments for you below.

Transition payment compensation scheme to remain in place until 2028

The abolition of the transition payment compensation scheme has been postponed by one year, until 1 January 2028. Until then, employers can obtain compensation from the UWV for transition payments made upon dismissal after 104 weeks of illness. The government intends to link the abolition to a broader reform under which the transition payment will be transformed into a financial instrument that can be used to facilitate the transition from one job to another.

Unemployment benefits and maximum daily wage

The reduction of the maximum duration of unemployment benefits (WW) from 24 to 12 months has been further postponed until 1 January 2029. The other WW measures included in the coalition agreement, such as stricter eligibility requirements, a higher benefit during the first two months and a slower accrual of WW entitlements, will be introduced from 2030.

In addition, the planned 20% reduction of the maximum daily wage will no longer go ahead. This is relevant to employers who are required under a collective labour agreement, social plan or employment agreement to supplement an employee’s benefits, for example during maternity leave or in the event of a WIA disability benefit. A lower maximum daily wage would have meant that employers would have had to pay a larger portion themselves.

Sickness and incapacity for work

The government intends to simplify the sickness and incapacity-for-work system and make it easier to administer. The following measures are planned:

• Company doctor’s advice to be decisive in the RIV assessment: to provide employers with greater certainty and reduce the risk of wage sanctions, the company doctor’s assessment of the employee’s work capacity will be decisive. If the employer has followed this advice, it will in principle have complied with its obligations.
• Reintegration during the second year of illness: small and medium-sized employers will have more scope, in consultation with the employee, to focus entirely on reintegration with another employer (the “second track”) from the second year of illness onwards.

There are also plans to make the continued payment of wages during illness more workable for SMEs and to reform the WIA system, including the abolition of the IVA scheme.

Flexible work and self-employed workers

The More Security for Flexible Workers Act (Wet meer zekerheid flexwerkers) was adopted by the Senate on 7 July 2026 and will be introduced in phases. As of 31 December 2026, agency workers will have a statutory right to employment conditions that are at least equivalent to those of employees employed directly by the hirer. For agency workers covered by the Collective Labour Agreement for Agency Workers, equivalent remuneration has already applied since 1 January 2026.

The remaining provisions will take effect on 1 January 2028. Among other things, zero-hours contracts will then be replaced by bandwidth contracts: contracts specifying a minimum and maximum number of hours, with the maximum being no more than 30% above the minimum. You can read more about this in our previous blog post about this act.

The government is also working on the Self-Employed Persons Act (Zelfstandigenwet). This Act is intended to provide greater clarity in advance as to whether someone is working as a self-employed person or as an employee. The intended effective date is 1 January 2028. The Act introducing a legal presumption of an employment agreement based on an hourly rate has already been adopted. Under this Act, an employment agreement is presumed to exist below a certain hourly rate, which is expected to be approximately €38 per hour. In the meantime, enforcement against false self-employment will continue.

Modernization of non-competition clauses

The bill to modernise non-compete clauses is expected to be submitted to the House of Representatives in late 2026 or early 2027. The key elements of the proposal are that a non-compete clause may apply for no more than one year, that its duration and geographical scope must be specified and justified, and that the employer must pay compensation equal to 50% of the monthly salary for each month in which it invokes the clause. Please note that existing non-compete clauses will remain valid, but the new rules governing the invocation of the clause and the compensation payable will also apply to existing non-compete clauses. In our previous blog post about this bill We provide a comprehensive overview of the consequences.

Crisis Staff Retention Act

The Crisis Staff Retention Bill (Wet personeelsbehoud bij crisis) is intended to replace the current short-time working scheme. Employers that, due to a crisis falling outside the normal scope of entrepreneurial risk, have at least 20% less work for a period of two months will be able to use two measures for up to six months: temporarily redeploying employees, and paying 10% less salary for hours not worked, supplemented by a wage subsidy from the UWV. Before deciding to use these measures, employers must seek the advice of the works council. The intended effective date is 1 January 2029. Read more here in our previous blog post.

Relevant in the short term: the WTTA

On 1 January 2027, the Admission of Personnel Supply Act (Wet toelating terbeschikkingstelling van arbeidskrachten, “Wtta”) will enter into force. Parties that supply personnel will then only be permitted to make workers available if they have been authorised by the Dutch Labour Supply Market Authority (Nederlandse Autoriteit Uitleenmarkt, “NAU”). In certain circumstances, an exemption may be applied for. Hirers will no longer be permitted to do business with suppliers that have not been authorised.

A transitional arrangement applies to existing suppliers. They must register between 1 November and 31 December 2026 and subsequently apply for authorisation between 1 May and 30 June 2027. Provided they do so, they can continue supplying workers while their application is being assessed. The year 2027 will serve as a transitional year, during which the supply of workers may continue if the supplier has registered for the transitional arrangement. From 1 January 2028, the Netherlands Labour Authority will start enforcement, and hirers may also be fined if they hire workers from a supplier that has not been authorised.

Employers that hire workers are therefore advised to check with their suppliers now whether they will register for the transitional arrangement in time and subsequently apply for authorisation.