Do you run a business in the Netherlands and would you like to keep or hire an employee who has reached the state pension age? You must take into account the contract of employment, working conditions and financial obligations.
Your employee will receive an old age pension (AOW) from the day they reach their AOW (state pension) age. Their employment contract can be terminated upon reaching the state pension age. If the contract has expired, but you want to keep employing your employee, you can start a new contract of employment.
Do you want to terminate the contract of employment?
In some cases employment contracts automatically expire when employees reach the state pension age, without the employer having to terminate them. This will be specified in the CAO or employment contract. Has nothing been agreed and do you want to end the employment contract when or after your employee reaches the state pension age? You will have to give your employee notice at least one month before he or she reaches the state pension age. You do not have to consult the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen, UWV) or a court. If you hire an employee after they reach state pension age, the regular dismissal procedures apply.
Do you want to continue the contract of employment?
Do you want to continue the employment contract of an employee who has reached the AOW age? Please note that this may have disadvantages. You as an employer will withhold salaries tax, but you will no longer pay contributions for unemployment insurance, sickness benefits, incapacity insurance, and state pension. This means your employee will no longer be 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 the employer.
Terms of employment new employment contract
If your collective labour agreement does not list terms of employment for state pensioners, you must determine which terms you will be offering your employee in the new contract of employment. The terms of employment will depend on the type of contract, where special attention must be paid to salary and leave.
Dismissal at the age of 65 not allowed
If the collective labour agreement states that the employment contract will be terminated at the age of 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 a contract of employment because of the employee's age can be nullified by a court of law at the employee's request.