The DBA law was introduced to clarify the relationship between clients and self-employed freelancers. The Tax Administration wants false self-employment occur, because an employee in paid employment contributes to social security, whereas a self-employed person (zzp’er) is responsible for themselves. A growing group of self-employed people can have consequences for the social security system.
At present it is difficult for the Tax Authority to correctly assess employment relationships, which leads to uncertainty for both clients and self-employed contractors. The proposal by caretaker minister Van Gennip should provide clarity about when there is an employment relationship and when there is not.
For freelancers, ranging from communications specialists to ICT professionals, who work as a subcontractor for a client, there is a chance that they will be considered 'pseudo-self-employed' under this law. This is a
conscious choice
van Van Gennip, because “every self-employed person could possibly be falsely self-employed, within ‘all incomes and all sectors’.”
Adjustments to the DBA law
Thanks to the new bill, an employment relationship no longer has to meet three conditions in order to exist. Currently 'wages', 'authority' and 'work in a personal capacity' are leading. Only when these three criteria are met is it referred to as an employment relationship. The new bill consists of two parts :
1. Criteria for determining the distinction between employees and self-employed (zzp’ers).
2. A legal presumption of employment at a rate of €32,24 or less. Bij the assessment of whether someone can be hired as a self-employed contractor (zzp’er) the following criteria are looked at:
- Is there a relationship of authority?
- Does the work constitute a core task within the organization (embedding)?
- Is there self-employment within the employment relationship?
At embedding gaat het om work that people in employment also perform: taking part in shifts and being present at clients. If the first two points are absent, someone can be hired as a self-employed contractor (zzp’er). If point 1 or point 2 is present, it is examined whether there is sufficient entrepreneurship within the assignment. Can he or she sufficiently work on his or her own account and at his or her own risk? Then the assignment can nevertheless be carried out by a self-employed contractor.
The second part of the bill concerns a legal presumption of employee status. In short, this means that if someone works for an hourly rate lower than €32.24, there is a legal presumption that he or she should be regarded as an employee. The consequence? That person can later demand in court that he or she is entitled to, for example, minimum wage, protection against dismissal, and continued payment during illness. It is up to the client to provide evidence why the worker truly is a self-employed contractor (zzp’er).
Internet consultation
The legislative process for the proposal proceeds differently because of the cabinet's caretaker status. The Council of Ministers agreed at the end of September to a internet consultation to start about the law. From 6 October social parties, stakeholders and other involved parties have at least four weeks to respond. Internet consultation offers those involved the chance to share their concerns and suggestions and to exert influence on the final legislation.
Various parties from the industry actively participate in this consultation, to ensure that all interests are taken into account in the legislative process. Afterwards, the responses are processed on which the Council of State gives advice, after which the law goes to the House of Representatives for further consideration.
Upcoming elections
In the meantime there are elections, and this topic is on the agenda of the formation. It is possible that the House of Representatives still has to assess whether the proposal ‘ controversial ’ is and then it is not discussed further in the House of Representatives. After all, there are different views on how the assessment of employment relationships should be simplified and which criteria should be applied.
Some political parties and stakeholders have raised objections to certain aspects of the law, and this has already led to discussions and debates. The elections can change the political course and influence the progress of the bill, which can lead to changes in the legislation or its implementation.
Stay informed of all developments around this topic on our special webpage about the WDBA
