Work performed by state pensioners
Do you run a business in the Netherlands and does an employee reach state pension age (AOW age)? Employees are allowed to continue working after reaching state pension age. You must then take into account the conditions of employment for state pensioners.
Continuing the contract of employment of state pensioners
Does your employee reach state penion age (AOW-leeftijd)? And do you want to keep employing them? Then you must ensure that they have a valid employment contract:
- Does the contract (employment agreement) or the collective labour agreement (CAO) states that the contract ends when your employee reaches the state pension age? Then you must agree on a new contract to keep the employee employed.
- Does the CAO and contract specify that an employee can continue work after reaching AOW age? Then the employment contract continues.
You must comply with the rules for state pensioners who continue working. You will have to withhold wage tax, but you will no longer pay contributions for unemployment insurance, sickness benefits, incapacity insurance, and state pension. This means your employee is no longer insured against unemployment and incapacity for work. The employee will still be entitled to sickness benefit, for which the Employee Insurance Agency (UWV) will charge you as the employer.
Terms of employment for state pensioners
You can offer an employee who has reached state pension age at most 6 temporary (fixed-term) contracts during a period of at most 4 years. After 6 contracts or after 4 years, the employment contract will automatically become a permanent contract. You are not obligated to increase or decrease the number of working hours if the employee requests it.
You pay the state pensioner at least minimum wage. You must also pay them holiday allowance.
Illness and reintegration of state pensioners
In case the employee becomes ill, you must:
- continue to pay their wages for 6 weeks.
- take measures that allow your employee to do their own or other suitable work within your company insofar as that is possible.
You do not have to draw up a return-to-work plan or a back to work action plan. You also do not need to look for suitable work with another employer.
Is your employee still ill after 6 weeks? Then you may dismiss your sick employee.
Rules for termination of employment contracts of state pensioners
Your employee will receive an old age pension (AOW) from the day they reach their state pension age (AOW-leeftijd). You can then end the employment contract. It depends on the contract how you do this:
- Does the employment contract or CAO specify an agreement on the end date? Then the employment contracts automatically expires on that date. As the employer you do not have to terminate the contract.
- Does the employment contract or CAO contain no agreement on the end date? If you want to end the employment contract, you will have to give your employee notice. The notice period is 1 month. You do not have to consult the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) or the sub-district court.
If you dismiss your employee upon reaching state pension age, you do not have to pay transition payment.
Dismissal at 65 not allowed
If the collective labour agreement states that the employment contract will be terminated at a specific age such as 65, this is in conflict with the Dutch Equal Treatment in Employment Age Discrimination Act (Wet gelijke behandeling op grond van leeftijd bij de arbeid, WGBLA). Termination of an employment contract because of the employee's age can be nullified by a court of law at the employee's request.