BenefitsBit: Hard Brexit: How can employers prepare regarding their UK employees in the Netherlands?
It is uncertain yet whether the European Union and the United Kingdom will reach a Brexit agreement in time.
Employers can anticipate the no-deal scenario (a hard Brexit) and ensure that business-critical nationals from the UK (UK employees) can remain or start working in the Netherlands after 29 March 2019. In the event of a hard Brexit, UK employees will need a work permit and residence permit to work in the Netherlands. An application procedure for a work permit and residence permit may last longer than 90 days, so it may be time to take action soon.
Below you will find an outline of some of the options employers have with respect to applying for a work permit and a residence permit for their UK employees, and some other legal and tax issues with respect to employment of UK employees in the Netherlands in the event of a hard Brexit.
Work permit / residence permit for highly skilled UK employees
Highly Skilled Migrants Program
One of the options is a residence permit under the Highly Skilled Migrants Program. A work permit is not needed. Certain requirements must be met. For example, the salary standard for this program for 2018 is as follows: EUR 3,229 (employees younger than 30) and EUR 4,404 (employees aged 30 and older). Only employers who are recognized as a sponsor by the Immigration and Naturalisation Service can submit the application for a residence permit under the Highly Skilled Migrants Program. An application may take two to four weeks. Employers who do not have the status of a recognized sponsor yet, need to apply for the recognized sponsorship first. Employers should take into consideration that such application procedure can last up to 90 days. It would be recommendable for these employers to start this application procedure soon, in order to ensure that their UK employees can stay or come to the Netherlands to (continue to) work here after 29 March 2019.
In case of intra-corporate transfers of highly skilled employees from a company in the UK to a company in the Netherlands, a specific residence permit has to be obtained. A work permit is not required. The employee must have an employment agreement with a UK employer and must meet the same salary standard that applies for the Highly Skilled Migrants Program. The procedure for a residence permit for intra-corporate transferees may last longer than 90 days if the employer is not a recognized sponsor yet.
European blue card
Another option for highly skilled UK employees might be the EU blue card for the Netherlands. Strict requirements apply, such as a Dutch employment agreement for at least one year, a certified diploma confirming a higher education program of at least three years, and a monthly gross salary of EUR 5,160 (2018). To apply for this permit, an employer does not need to be a recognized sponsor. If an employer is not a recognized sponsor yet, the application procedure can take longer than 90 days.
Above only some of the options to legally have UK employees reside and work in the Netherlands after 29 March 2019 are described. Based on the personal situation of the individual employee, we can assist in determining the most smooth and convenient way to have the necessary work permit and residence permit for the UK employee in place before 29 March 2019.
Other legal issues with respect to employment of UK employees in the event of a hard Brexit
A hard Brexit would not affect the possibility to apply Dutch or UK employment legislation to the employment contract. In case UK law governs the employment contract, certain Dutch employment legislation, such as the Minimum Wage Act, will nevertheless apply to that contract immediately. Also, the longer an employee works in the Netherlands, the more likely it will be that all Dutch employment law applies to his employment contract.
The rules with respect to taxation of salaries should not be affected by a hard Brexit. Salaries paid for employment carried out in the Netherlands shall, in principle, be taxable in the Netherlands. In case of working in both countries, both countries may levy income tax, and one of them shall in principle have to grant a reduction of the tax that is due, in order to avoid double taxation.
Social security law
With respect to social security legislation, an employee could be confronted with other social security legislation due to the Brexit, because the EU rules on determining the applicable social security legislation will no longer apply. A bilateral treaty, which was concluded between the Netherlands and the UK in 2006, will apply instead.
For any advice or for further questions on this topic, please contact one of our immigration law experts: Wendy Terporten, Nico van Dijk or Edith Franssen. You can also always contact your regular Loyens & Loeff advisor.
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Edith FranssenSenior associate Attorney at law
Edith Franssen, attorney at law, is a member of the Employment & Benefits practice group in our Rotterdam office. She focuses on international mobility, especially in the maritime and transport sector.T: +31 10 224 64 53 E: firstname.lastname@example.org