If you pay contractors in the Netherlands, your legal footing shifts on July 1. The new Netherlands VBAR worker classification rule flips the burden of proof. Anyone billing below roughly €36 an hour is now presumed to be your employee. Meanwhile, the United States quietly made two payroll costs permanent. Today’s digest covers the Dutch reform, California’s $25 healthcare wage, and a relocation tax change for US moves. First the big one, because it rewires how you engage Dutch freelancers.

Netherlands Flips the Contractor Burden of Proof on July 1

What the Netherlands VBAR worker classification rule changes

The Dutch bill known as Wet VBAR is expected to enter into force on July 1, 2026. It codifies the Supreme Court’s Deliveroo framework and adds a hard line: a legal presumption of employee status for anyone earning less than €36 per hour. (Source: Hogan Lovells Dutch Employment Law Outlook 2026) The government confirmed on March 6 that the threshold is indexed to the statutory minimum wage. After indexation, it sits at about €38 per hour as of January 1, 2026.

So the number itself moves with the minimum wage. But the mechanism is what matters. Today, a worker who feels misclassified has to argue they are really an employee. Under the new rule, that flips. If your contractor bills below the threshold, you are presumed to be the employer. As a result, you carry the job of proving genuine independence.

Why it matters for distributed teams

Specifically, this is core risk for any startup that staffs design, support, or junior engineering through Dutch freelancers. For example, if you have three contractors in Amsterdam each billing €30 an hour, all three now sit under the presumption from day one. The test weighs everything, so authority, integration into your team, and entrepreneurship all still count. (Source: Pinsent Masons) Even so, the starting position is no longer neutral. But get the classification wrong, and you face back-dated payroll taxes, pension contributions, and holiday pay.

Still, the difference between a contingent worker and a genuine contractor stops being academic here. Instead, it becomes the line between a clean payroll and a tax bill.

Netherlands VBAR worker classification: what to do before July 1

First, list every Dutch contractor and their hourly rate. Second, flag anyone below €38 an hour for review. Because the presumption attaches to the rate, that group is where your exposure concentrates. Finally, decide per person. Either lift the rate and document real independence, or convert them to payroll through an Employer of Record in the Netherlands.

Netherlands Stacks Two More Payroll Changes on the Same Day

The classification rule does not arrive alone. On the same July 1, 2026 date, equal pay rules for temporary and agency workers take effect. So agency staff must be paid in line with comparable direct hires. (Source: Houthoff) In addition, compensation for the statutory transition payment through the UWV will be limited to small employers with fewer than 25 staff.

So what does this mean for you? If you run a mid-sized team in the Netherlands and rely on agency workers, budget for higher hourly costs from Q3. And if you were counting on reclaiming severance payouts, that route narrows to genuinely small employers only. In short, both changes land the same week as the VBAR shift, which makes July 1 a real compliance cliff for Dutch operations.

California’s $25 Healthcare Minimum Wage Reaches Big Systems June 1

Meanwhile, California’s healthcare minimum wage steps up across the Atlantic. From June 1, 2026, the $25 floor reaches large healthcare employers with 10,000 or more full-time-equivalent staff. Certain dialysis clinics are covered too. (Source: California DIR) Most other large hospitals and health systems reach the same $25 floor on July 1, 2026.

This is narrow but real. Do you employ patient-care or support staff inside a big California health system? Then your US payroll setup needs the new rate coded before the June 1 run. Otherwise you underpay and trigger wage-claim risk. For most startups with no California healthcare headcount, this one passes you by, so check your facility classification first.

US Makes Relocation Reimbursements Taxable for Good

Finally, here is the change that touches global mobility. The One Big Beautiful Bill Act, passed in July 2025, permanently ended the income exclusion for qualified moving-expense reimbursements. (Source: IRS Publication 15-B) For 2026, you reimburse a civilian employee’s US relocation as taxable wages. Every dollar lands on the W-2, with federal withholding and FICA applied. Only active-duty military and certain intelligence staff keep the tax-free treatment.

So if you are relocating an engineer to your US office, the relocation package now costs more on both sides. As a result, the employee owes tax on the benefit, and you may gross it up to keep them whole. So update your relocation policy and offer letters so nobody is surprised at year-end.

Quick Hits

• Colorado, US: Governor Polis signed SB 189 on May 14, delaying the Colorado AI Act to January 1, 2027 and stripping its algorithmic-discrimination duty of care. Employers using hiring AI get more runway, but disclosure duties remain. (Source: Fisher Phillips)
• Germany, EU: Germany is still tracking the June 2026 transposition window for the EU Pay Transparency Directive, while the Netherlands has pushed its deadline to January 1, 2027. If you hire in Germany, prepare pay-range disclosures now. (Source: CMS)
• United Kingdom: Under the Employment Rights Act 2025, electronic union ballots become available from August 2026, and the tribunal claim window doubles to 6 months from October 2026. (Source: Acas)

Action Items This Week

If you engage contractors in the Netherlands: Audit every freelancer’s hourly rate before July 1. The Netherlands VBAR worker classification presumption attaches to anyone under about €38 per hour. So review that group first, then convert or re-paper as needed.

If you employ healthcare staff in California: Confirm your facility’s size category first. Code the $25 rate for the June 1 payroll if you run a 10,000-plus FTE system. Smaller large systems have until July 1.

If you relocate anyone into the US: First, treat moving reimbursements as taxable wages for 2026. Then update offer letters and gross-up math accordingly.

If you hire in Germany: Start building pay-range and pay-gap reporting ahead of the June 2026 transposition window.

If these moving targets have you rethinking cross-border hiring, Asanify can help. Its Global HRMS and EOR handle multi-country payroll, classification, and compliance in one place. It is worth a look before your next international hire.

FAQ: Netherlands VBAR Worker Classification and Global Hiring

Q: What is the Netherlands VBAR worker classification rule?
A: It is a Dutch reform expected to start July 1, 2026. It presumes a worker is an employee if they earn below about €38 per hour. The employer, not the worker, must then prove genuine contractor status. The full test still weighs authority, integration, and entrepreneurship.

Q: Do we need an Employer of Record for one contractor in the Netherlands?
A: Often yes, if that contractor bills below the threshold and the work looks like employment. An EOR becomes the legal employer, runs compliant payroll, and removes misclassification risk. However, for higher-rate and clearly independent freelancers, a well-documented contract may be enough.

Q: Are employee relocation reimbursements taxable in the US in 2026?
A: Yes. For civilian employees, qualified moving-expense reimbursements are taxable wages and must appear on the W-2 with withholding and FICA. However, active-duty military and certain intelligence community moves still keep the tax-free exclusion.

Q: How often do these employment and payroll rules change?
A: Tax and wage rates usually shift annually, often between April and July. Classification and leave laws change less often but can move fast, as the Dutch July 1 package shows. A per-country compliance calendar is the only reliable way to stay ahead.

Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant  or Labour Law  expert for specific guidance.