The debate surrounding freelancers and bogus self-employment is more relevant than ever. The upcoming new Self-Employed Persons Act will bring significant changes for employers and freelancers. The law places the burden of proof on employers to demonstrate that there is no bogus self-employment. This means employers must clearly demonstrate that the freelancer is genuinely self-employed and not being used as a disguised employee.
False self-employment is a term often used in discussions about employment law and tax, and it plays a crucial role in protecting both freelancers and employees. With this new law, the government aims to combat abuse and ensure a fairer labor market. In this comprehensive guide, you'll discover what the new freelance law entails, why it's important, and what you, as an employer or freelancer, need to know to avoid problems.
What is false self-employment?
False self-employment means someone officially works as a freelancer, but in reality functions as an employee. This occurs, for example, when a freelancer works exclusively for a single client for a long period of time, under strict instructions, without any personal investment or risks.
The problem with bogus self-employment is that it allows employers to avoid social security contributions and taxes, while the self-employed person has fewer rights and protections. The new self-employed persons act is precisely intended to address this situation by establishing strict rules.
Why the burden of proof lies with employers?
The new law makes it much more difficult for employers to simply declare someone self-employed. Instead, they must actively gather evidence to demonstrate that there is no bogus self-employment. This helps combat abuses and ensures greater transparency in the labor market.
Examples of evidence include contracts stipulating self-employment, invoices showing actual business transactions, and the fact that the self-employed worker has multiple clients. This also provides the self-employed worker with more certainty about their position.
How exactly does the new self-employed persons law work?
The new law mainly revolves around the following:
- Reversing the burden of proof: It is no longer the self-employed person, but the employer who must demonstrate that there is genuine independence.
- Stricter criteria: Clearer requirements are being set for what independence means, for example in the areas of entrepreneurship and personal responsibility.
- Penalties for violation: Employers who do not comply with the rules risk fines and additional assessments of taxes and premiums.
- More protection for self-employed persons: Self-employed persons gain more control over their rights and employment position.
In addition, control authorities will have more opportunities to monitor, which will allow abuse to be detected more quickly.
Practical tips for employers and self-employed persons
Want to avoid bogus self-employment? Then it's important to keep the following points in mind:
- Make clear agreements: Ensure that contracts clearly describe the tasks and responsibilities and that it is an independent assignment.
- Work with multiple clients: A self-employed person who works for multiple clients is less likely to be considered falsely self-employed.
- Use invoices and business administration: Keep your books in order and demonstrate that real business transactions are taking place.
- Be critical of the working relationship: Avoid rigid direction and instructions that are typical for an employee.
- Inform yourself about the legislation: Stay up to date with the latest regulations and ensure your business grows with them.
How do you recognize false self-employment?
Sometimes it's difficult to determine whether someone is a genuine freelancer or a bogus self-employed individual. There are several signs that can help you:
- Exclusivity: The self-employed person works almost exclusively for one client.
- No entrepreneurial risk: The self-employed person runs little to no financial risk.
- Lack of own investment: No own tools, office space or marketing activities.
- Strict working hours and instructions: The self-employed person must adhere to fixed working hours and detailed instructions.
- Absence of marketing and acquisition: The self-employed person makes no effort to acquire new customers.
If several of these points apply, there is a good chance that there is a case of false self-employment.
What are the consequences of the new self-employed persons law?
The introduction of the new self-employed persons law means that employers will now have to handle contracts and collaborations with self-employed individuals much more carefully. In addition:
- More certainty for self-employed persons: As a self-employed person, you will soon have more protection against unwanted situations and unclear contracts.
- Financial risks for employers: If self-employed persons are used incorrectly, employers can expect fines and additional assessments.
- A fairer labor market: The law promotes transparency and prevents abuse of self-employed persons.
- Change in collaboration: Both employers and self-employed professionals may need to restructure their collaboration, for example by using multiple clients or flexible contracts.
The history of self-employed legislation in the Netherlands
The debate about freelancers and bogus self-employment has been going on in the Netherlands for years. Since the introduction of the Deregulation of Assessment of Employment Relationships Act (DBA) in 2016, there has been considerable uncertainty and resistance from employers and freelancers. The DBA legislation was intended to combat bogus self-employment, but instead led to considerable uncertainty and administrative burdens.
The new self-employed persons law builds on the lessons of the past and aims to create a better balance between flexibility and protection with clear rules and a reversed burden of proof.
Different types of self-employed people and self-employment
Not every freelancer is the same. There are several forms of self-employment that need to be distinguished:
- Fully self-employed entrepreneur: With own company, risks, customers and investments.
- Part-time self-employed: Someone who is partially self-employed, but works under supervision, for example.
- False self-employed: Someone who is officially self-employed, but is in fact an employee.
The new law focuses primarily on preventing the latter type, so that truly self-employed people retain their freedom and receive protection.
Important criteria for the VBAR
The Tax Authorities look at various aspects to determine whether you have an independent relationship:
- The degree of independence: How much control do you have over your work and planning?
- The presence of multiple clients: Do you have multiple clients or do you work exclusively for one client?
- Entrepreneurship: Are you taking financial risks and do you have your own investments?
- Control and supervision: Are you strictly managed or can you work independently?
- Contractual agreements: Are the agreements clearly and professionally recorded?
By clearly arranging these points, you increase the chance of a positive VBAR.
Why is the VBAR law so important?
The VBAR Act protects both self-employed persons and clients:
- For self-employed persons: You know for sure that you are truly seen as an entrepreneur and not suddenly as an employee.
- For clients: You avoid financial risks such as fines and additional assessments due to unclear employment relationships.
- For the government: It contributes to a fair labor market and prevents abuse of self-employment structures.
- For the market: It ensures transparency and trust between parties.
The VBAR law revolves around the following process:
- Application for the statement: A self-employed person or client can apply for a VBAR from the Tax Authorities to obtain clarity about the employment relationship.
- Investigation of the employment relationship: The Tax Authorities assess whether there is an independent relationship or an employment relationship based on various criteria.
- Award or rejection of the VBAR: If the relationship is clearly independent, the certificate will be issued. If there is doubt or proof of employment, the VBAR will be refused.
- Use of the VBAR: With a VBAR, you as a self-employed person or client have certainty and you avoid additional assessments or fines.
Difference with other legislation
The VBAR Act aligns with other laws and regulations, such as the DBA Act and the new Self-Employed Persons Act. These rules share the same goal: to prevent self-employed individuals from being wrongly treated as employees. What makes the VBAR unique is that it's an official and binding declaration that provides certainty.