/ December 14, 2008

Netherlands to Cap High-Income Severance Pay

The Cabinet recently endorsed legislation in the Netherlands which will amend the Dutch Civil Code to put a ceiling severance packages for those making EUR 75,000 or more per year.  Because higher income individuals are in a good position to find subsequent employment, the compensation ceiling has been set at one year’s salary.

This ceiling will only apply if the court permits the dismissal of the employee and does not affect contractual agreements between employers and employees.  Additionally, the law does not apply in cases of employer misconduct.

Source: Netherlands Ministry of Justice (site in English)

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