As one of her final acts as Minister of Social Affairs and Employment, (now former) Minister Van Gennip sent the amended bill on self-employed contractors, the VBAR (Clarification of the Assessment of Employment Relationships and Legal Presumption Act), to the Council of State on 21 June.
No fewer than 1,111 responses were received during the internet consultation. Many of the responses were critical of the proposal.
Unfortunately, this has not led to far-reaching changes.
Part 1. Assessment of the Employment Relationship
To answer the main question, “When may the work be done by a self-employed contractor?“, a number of criteria are still given as an indication, but a grey area remains.
The assignment itself and the assessment of the working relationship with the employer/client are the most important factors. Whether the worker is also a (genuine) entrepreneur continues to play a subordinate role in the amended bill as well, whereas in the past this was precisely one of the decisive criteria. The explanatory memorandum states that “the entrepreneurship of the individual worker is not central to the assessment of a specific employment relationship“.
The assessment of employee status starts with the work itself and the organization within which the work takes place. Are there indications of “employee status”, such as a clear relationship of authority, direction from a supervisor, or colleagues employed on a payroll basis doing the same work? Then there is a good chance that this is work for an employee. Unless there are more indications of “self-employment” within the work. Does the person have very specific knowledge that no one within the organization has, is that knowledge hired in temporarily, and does the person work “at their own expense and risk”? That points to self-employment.
Only once, after assessing the criteria from the VBAR, there are as many indications of employee status as of self-employment, is it examined whether someone is an “entrepreneur” and also behaves as such in society. Does that person have multiple clients per year? Is money invested in their own business? Are they registered with the Chamber of Commerce? Do they have their own website? Such entrepreneurial characteristics can ultimately tip the balance toward self-employment, but are subordinate to the criteria mentioned earlier.
In essence, then, little has substantively changed about the bill: the circumstances of the assignment determine whether someone should work as an employee or as a self-employed contractor, not the person’s entrepreneurship.
It was precisely on this point that many were critical, including during the debate on the proposal in the House of Representatives.
Part 2. The Legal Presumption
The second part of the bill concerns the “legal presumption of employee status”. This provides that if someone is hired at a rate of less than 33 euros per hour, they can easily claim employee rights from their “employer” and before the courts. Virtually everyone in the House of Representatives agrees with this measure.
In order to quickly introduce this part of the law and take action against false self-employment among vulnerable self-employed workers, Nieuw Sociaal Contract, SGP, and VVD previously proposed splitting the law and introducing this part straight away. Van Gennip saw no merit in that; the new Minister, Eddy Van Hijum, perhaps does. If this legal presumption is introduced, it will have far-reaching consequences, particularly for the hospitality, cleaning, healthcare, and construction sectors. Within these sectors, a great deal of work is currently done on a self-employed basis at or below 33 euros.
What happens next?
The coalition agreement of the new cabinet states that the Schoof cabinet will proceed with the VBAR bill. It is now up to the Council of State to provide its advisory opinion on the bill. That is expected this autumn. After that, Minister Van Hijum can still amend the bill before sending it back to the House of Representatives.
The House of Representatives will again debate the substance of the proposal and may also amend it. If the House of Representatives approves it, the new law will only take effect after 1 January 2026.
However, be warned, because the Dutch Tax Authorities will already start enforcing against false self-employment from 1 January 2025. How will they do that? They will do so based on the current rules, namely the DBA Act and case law. On that basis, the Tax Authorities may take into account “all the circumstances of the case“. So they look not only at the contracts, but also at the practice: the actual situation in the workplace.
Do you work with self-employed contractors? Then make sure that, before 1 January 2025, you know how you want to handle this in the new year and what risks you run.
Masterclass ‘Will the real self-employed contractor please stand up? The current state of affairs.’
On 3 October 2024, The Legal Company is organizing a breakfast session clarifying the tax and legal status of the self-employed contractor. This way you’ll know what to look out for when entering into an agreement with a self-employed contractor. For more information and to register, click here!
