Cross-border employment law for Dutch employers

Cross-border employment raises four separate questions that have to be answered one by one: which employment law applies, which court has jurisdiction, where social security is due, and whether the person is allowed to work in that country at all. Tax is a fifth question with its own rules. They do not move together, and an employer that answers only the contractual one is usually the employer that finds out too late. This guide sets out the framework a Dutch employer needs when its people work from somewhere else. A word on terminology before the detail. This is an area in which Anglo-American concepts are frequently imported without checking whether they exist here, and several do not. Dutch law has no employment at will, no general right to work from home, and no discovery procedure to establish where someone actually worked. What it does have is a preventive dismissal system, a statutory transition payment and a set of mandatory rules that cannot be contracted away. Our guide to Dutch employment law sets out that framework, and it is the baseline against which any cross-border arrangement has to be measured.

Which employment law applies

A person working remotely on a laptop with a world map graphic in the background

Within the European Union the answer comes from the Rome I Regulation, Regulation (EC) No 593/2008, and specifically from article 8, which deals with individual employment contracts. The rule is easy to state and easy to underestimate.The parties may choose the applicable law. That choice is valid, but it cannot deprive the employee of the protection of the mandatory rules that would have applied in the absence of a choice. In other words, a Dutch law clause in the contract of an employee who works permanently from Spain does not switch off Spanish dismissal protection, minimum wage, working time or holiday entitlement. It layers Dutch law on top, and the employee keeps whichever protection is better.Where no law is chosen, the contract is governed by the law of the country in which, or failing that from which, the employee habitually carries out the work. Temporary employment in another country does not change that habitual place. If no habitual place can be identified, the law of the country where the business that engaged the employee is situated applies. And there is an escape clause: if the whole of the circumstances shows that the contract is more closely connected with another country, that other country’s law applies instead.

What determines the habitual place of work

The habitual place is a factual test, not a contractual one, and the Court of Justice of the European Union reads it broadly: it is the place from which the employee actually carries out the essential part of the duties, taking account of where the work is organised, where the employee returns after assignments, and where the tools and instructions come from. A few points weigh heavily in practice:

Where the time is actually spent. The country in which the employee performs most of the working days is the strongest single indicator.
Where the work is organised from. Where the employee reports, receives instructions and plans the work matters, and it can point in a different direction from where the laptop is open.
Duration and permanence. A three-month stay abroad rarely shifts the habitual place; an indefinite relocation almost always does, and there is no fixed number of days at which it happens.
Supporting elements. The currency and place of payment, the social security registration, the language of the contract and the place where equipment is provided are corroborating rather than decisive.

The practical consequence for a Dutch employer is uncomfortable. Dutch dismissal law is mandatory and unusual: dismissal requires prior permission from the UWV or a court decision dissolving the contract, and a statutory transition payment is due. Where a Dutch employer becomes subject to another country’s mandatory rules, or where a foreign employer takes on someone working habitually from the Netherlands, that preventive dismissal system may apply to a relationship that neither party expected it to govern.

Which court decides

Applicable law and jurisdiction are separate questions with separate rules, and they routinely produce different answers.Within the European Union jurisdiction in employment matters is governed by section 5 of the Brussels I bis Regulation, Regulation (EU) No 1215/2012, in articles 20 to 23. The structure protects the employee. An employee may sue the employer either in the member state where the employer is domiciled or in the courts of the place where the employee habitually carries out the work, or last did so. An employer, by contrast, may sue an employee only in the courts of the member state where the employee is domiciled.A jurisdiction clause in an employment contract is therefore of limited value: it is only effective if it was agreed after the dispute arose, or if it allows the employee to bring proceedings in courts other than those named in the Regulation. A clause requiring all disputes to be brought in Amsterdam will not stop an employee who works from Portugal from suing in Portugal. Our overview of cross-border legal issues sets out the wider picture for businesses operating in more than one country.

Posting is not the same as remote working

A split image showing a city skyline and a person working on a laptop in a home office setting

Two situations are constantly confused, and they carry different obligations. Posting is where an employer sends an employee to another member state to perform work there for a limited period, on the employer’s instruction and for the employer’s account. Remote working is where the employee, usually at their own request, performs the same job from another country.Posting is regulated. The Posting of Workers Directive, as amended in 2018, requires the host state’s core terms and conditions to be applied to the posted worker from day one: pay, working time, holidays, health and safety, equal treatment and the rules on accommodation. After twelve months of posting, extendable to eighteen on a reasoned notification, the host state’s full employment law applies apart from a small number of excluded subjects such as dismissal protection and supplementary pensions.In the Netherlands the Directive is implemented in the Terms of Employment of Posted Workers in the European Union Act (Wet arbeidsvoorwaarden gedetacheerde werknemers in de Europese Unie, WagwEU). A foreign employer posting workers here must notify the posting in advance through the online reporting desk, designate a contact person, and keep specified documents available for the Netherlands Labour Authority. The Dutch client receiving the workers has its own duty to check the notification. Failure to notify is enforced by administrative fines against both parties, and chain liability for wages under article 7:616a of the Civil Code means a client can be held liable for wages the employer did not pay.Where staff are supplied through an agency, a further change is coming. Under the Act on the admission of the provision of labour (Wet toelating terbeschikkingstelling van arbeidskrachten, Wtta), agencies must register with the labour admission authority between 1 November and 31 December 2026. The Act enters into force on 1 January 2027, with enforcement from 1 January 2028, and hirers will only be permitted to engage admitted agencies. Cross-border staffing arrangements should be reviewed against that timetable now rather than in the last quarter of 2026.Remote working at the employee’s own initiative falls outside the posting rules, but that does not make it simpler. It shifts the questions to applicable law, social security, tax and immigration, all of which are dealt with below.

Social security and the A1 certificate

A split image showing a magnifying glass over a financial document and a person making an online payment.

Social security within the European Union, the European Economic Area and Switzerland is coordinated by Regulation (EC) No 883/2004, and it works on a simple principle: a person is subject to the legislation of one member state only, in principle the state where the work is performed.Two rules do most of the work in practice. An employee who works in two or more member states is covered in the state of residence if a substantial part of the activity is performed there, and the settled benchmark for substantial is at least twenty-five per cent of working time or pay. A posted worker sent temporarily to another member state can remain covered by the sending state, subject to conditions and to a maximum duration.Since 1 July 2023 a framework agreement based on article 16 of that Regulation has changed the position for cross-border teleworking. Where both the state of the employer and the state of residence have signed the agreement, an employee may telework from the state of residence for less than half of their working time and remain insured in the employer’s state. The arrangement is not automatic: an application must be made, and in the Netherlands the resulting A1 certificate is issued by the Sociale Verzekeringsbank. It is the employer’s responsibility to apply.The A1 certificate is the document that proves which system applies, and it should exist before the work starts rather than after an inspection. Outside the EU, the EEA and Switzerland, coverage depends on whether a bilateral social security treaty exists with the country concerned, and on what it says; several countries have no treaty with the Netherlands at all, in which case double contributions are a real possibility.

Tax: know where the risk sits, then take tax advice

Tax follows its own rules and its own treaties, and it is not a subject on which this firm advises. What an employer does need to know is where the risks arise, so that the right question reaches the right adviser in time.Three points are worth flagging. Income tax on employment income is in principle allocated by the applicable double taxation treaty, and the answer often differs from the social security answer, so an employee can be insured in one country and taxed in another. Wage withholding obligations may arise in the country where the work is performed, which means a payroll registration there. And an employee working from another country can create a permanent establishment for the employer, exposing part of the corporate profit to tax in that country; whether that happens depends on what the employee actually does, in particular whether they habitually conclude contracts or play the principal role in doing so, rather than on what the contract calls their role.None of these are questions to settle by analogy with a colleague’s situation. Involve a tax adviser before the arrangement starts, because the cost of unwinding a permanent establishment or of a retroactive payroll registration is many times the cost of the advice.

Immigration: who may work from the Netherlands

Nationality decides whether the work is permitted at all, and this is the question most often skipped.Nationals of the European Union, the European Economic Area and Switzerland may live and work in the Netherlands without a permit. Everyone else needs the right to reside and the right to work, and the two are separate. Under the Foreign Nationals (Employment) Act (Wet arbeid vreemdelingen) an employer may not have work performed by a third-country national without a work permit, unless an exemption applies. Depending on the situation this takes the form of a single permit combining residence and work, a separate work permit obtained by the employer from the UWV, or a residence permit as a highly skilled migrant applied for through a recognised sponsor.Two practical warnings. First, the salary criteria for the highly skilled migrant scheme are set each year by the government and published by the Immigration and Naturalisation Service; check the current figures rather than the ones in last year’s file, and note that they are gross salary excluding holiday allowance. Second, a stay on a tourist basis or under a visa waiver does not confer a right to work, and an employee who works remotely from a country where they have no right to work creates exposure for the employer as well as for themselves.The mirror image matters too. A Dutch employer whose employee moves to a third country needs to know whether that country requires a work authorisation for remote work performed for a foreign employer. A growing number of states now operate specific remote-worker or digital-nomad permits, and their conditions vary widely. Confirm the position before the move, not afterwards.

There is no right to work from home in the Netherlands

This is the point most frequently misstated in English-language material about the Dutch market, so it is worth being precise.The Working Where You Want Act (Wet werken waar je wilt), which would have obliged employers to treat a request about the place of work in the same way as a request about working hours, was rejected by the Senate on 26 September 2023. Nothing has replaced it. What applies is the Flexible Working Act (Wet flexibel werken): an employee with at least twenty-six weeks of service may ask in writing, at least two months in advance, to change working hours, working times or the place of work. For hours and times the employer must grant the request unless a serious business or service interest stands in the way. For the place of work the employer must only consider the request and discuss it with the employee, and may refuse it without meeting that higher threshold.Two qualifications keep this from being an unlimited employer right. If the employer has not given its decision one month before the intended commencement date, the request takes effect as made. And an employer that has allowed an arrangement for years, or promised it at the interview, may still be bound by the standard of good employer conduct in article 7:611 of the Civil Code.Where the disagreement is about attendance rather than about which law applies, it usually plays out as an ordinary employment dispute: a warning, a suspension of wages, mediation and, if it goes that far, an application to dissolve the contract on the ground of a disturbed working relationship. Our article on handling workplace disputes in a hybrid workforce deals with that sequence and with the duty of care that runs alongside it.For cross-border cases the more important consequence is different. Because there is no right to work from abroad, an employer may make prior written permission a condition, limited to a named country and a defined period. That single clause is the most effective control an employer has, because it prevents the applicable law, social security and tax positions from changing without anyone noticing.

Data, security and the duties that travel with the employee

A person sitting at a desk with a secure lock icon overlaid on their laptop screen

An employee who moves takes the employer’s data with them, and the employer remains the controller. Three sets of obligations deserve attention.The first is the transfer of personal data outside the European Economic Area. Under chapter V of the General Data Protection Regulation such a transfer needs a legal basis: an adequacy decision by the European Commission, or appropriate safeguards, in practice the standard contractual clauses adopted by the Commission, supported by an assessment of whether the law of the destination country actually allows those clauses to be effective. Remote access from a third country counts as a transfer. An HR file that is readable from a laptop in a country without an adequacy decision is a transfer even if the server never moves. Our guide on the General Data Protection Regulation sets out the framework in more detail.The second is breach notification. Article 33 of the Regulation requires notification to the supervisory authority without undue delay and, where feasible, within seventy-two hours, and article 34 requires the individuals to be told where the risk to them is high. Since 15 August 2026 the Cybersecurity Act (Cyberbeveiligingswet), implementing the NIS2 Directive, adds a separate regime for essential and important entities, with registration at the National Cyber Security Centre and reports within twenty-four and seventy-two hours. An incident on a home network abroad can trigger both.The third is the duty of care, which does not stop at the border. The Working Conditions Act requires a risk assessment covering the way employees actually work, including at home, and a policy against psychosocial workload. Where another country’s mandatory health and safety rules apply to the workplace, they apply in addition. Practically, this means the employer should know what the working set-up abroad looks like, should record what it provided and instructed, and should not treat an employee abroad as outside its responsibility.

Monitoring from a distance

The temptation to compensate for lost visibility with software is strong and legally expensive. Monitoring employees is processing of personal data and requires a lawful basis, in practice a legitimate interest that has been weighed and documented; consent from an employee is rarely valid because the relationship is unequal. Employees must be informed in advance, the monitoring must be the least intrusive means available, and a systematic or large-scale measure may require a data protection impact assessment. In the Netherlands the works council also has a right of consent under article 27 of the Works Councils Act for any facility aimed at observing or monitoring attendance, conduct or performance. Introducing a tool without that consent gives an employee a ready-made argument in any later dispute.

Turning this into a policy that holds

A workable cross-border policy is short and answers concrete questions. Which countries are pre-approved and for how long. Who decides on a request for a new country, on what criteria, and within what period. What must be arranged before departure: the A1 application, the payroll and immigration check, the tax confirmation, the equipment and security requirements. What the employee must report if their situation changes. And when the arrangement is reviewed, because treaties, thresholds and framework agreements change from year to year.Two habits keep the policy honest. Require permission in writing for a defined period rather than granting it open-endedly, and record the reason for every exception. A file that shows a considered decision, taken on stated grounds, is the difference between an arrangement that is defensible and one that merely happened.

Frequently asked questions

The questions below are the ones that arise in almost every cross-border employment file.

Can my employer force me to return to the office?

The answer to this really hinges on what your employment contract says and what the local laws are. In the Netherlands there is no right to work from home. The Working Where You Want Act was rejected by the Senate on 26 September 2023, so the Flexible Working Act still applies: an employee with at least twenty-six weeks of service may request a change of workplace, and the employer must consider the request and discuss it, but does not need a serious business interest in order to refuse it.

Your original contract is the foundation. If it clearly states that your position is fully remote with no strings attached, it becomes much more difficult for your employer to legally demand a return without your agreement. It’s always wise to review your contract carefully and, if needed, get advice from a local legal expert.

The heart of the matter is often a balancing act between the company’s needs, what was agreed in your contract, and your statutory rights. What was put on paper at the beginning of your employment carries a lot of weight in any disagreement.

Who is responsible for my taxes if I Work in another country?

As a general rule, you pay income tax in the country where you are physically doing the work. It’s typically your employer’s job to handle withholding these taxes and to pay the required social security contributions in that country.

To prevent you from being taxed on the same income twice, countries have what are called double-taxation treaties. But the rules can be incredibly complex. It’s crucial for both you and your employer to check the applicable double taxation treaty, because that treaty decides which country may tax which part of the income, and the answer can differ from the social security answer. This is a question for a tax adviser rather than for a lawyer.

What if my employer has no office in my country?

This is a common scenario. If your employer doesn’t have a legal entity where you live, they run into some serious compliance risks. One of the biggest is accidentally creating a ‘Permanent Establishment’, which could make them liable for corporate taxes in your country. To steer clear of this, companies often turn to an Employer of Record (EOR).

Think of an EOR as a third-party organisation that acts as the official, legal employer for you in your home country, but on behalf of your actual company. They take care of all the local payroll, taxes, and compliance headaches. This allows the work to be arranged without setting up a local entity, but it is not a cure-all. An employer of record does not decide which employment law governs the relationship, and it does not by itself remove the risk of a permanent establishment, which depends on what the employee actually does in that country.

Law and More advises employers and employees on cross-border employment in the Netherlands: determining the applicable law and the competent court, posting notifications under the WagwEU, A1 applications and social security coordination, work and residence permits, remote working policies, and the employment law consequences when an arrangement has to be brought to an end. If you are considering an arrangement across borders, or one has already started without the paperwork, contact us for an assessment of where the exposure actually sits.