The future of freelancers
There is currently some unrest among freelancers and companies working with them. This unrest has arisen after the tax authorities announced that as per 1 January 2025, the so-called ‘enforcement moratorium’ will come to an end and they will actively enforce against false self-employment.
In parallel to this development, a bill has been submitted for a new law aimed at preventing false self-employment: the so called ‘Wet Verduidelijking Beoordeling Arbeidsrelaties en Rechtsvermoeden’ (in short: ‘Wet VBAR’). It is currently unclear whether this law will actually come into effect, as the Raad van State, the formal advisory council of state, advised negatively on the proposal on November 7th.
This memo explains both developments. It also addresses what you need to pay attention to if you want to (continue to) work as a freelancer or if you want to (continue to) hire a freelancer.
Per 1 January 2025: end of the tax enforcement moratorium
In recent years, the tax authorities have not enforced against false self-employment, except in evident cases of misconduct. The so-called ‘enforcement moratorium’ was established because the current Law on Deregulation of Assessment of Employment Relationships (Wet Deregulering Beoordeling Arbeidsrelatie, or in short:‘Wet DBA’), leads to too many uncertainties about whether freelancers are truly independent, self-employed workers (instead of employees in disguised). Consequently, there has been uncertainty about whether parties have rightly chosen a freelance contract (freelance or ‘zzp’-construct) instead of an employment contract (employment relationship).
In recent years, the tax authorities have attempted to provide some guidance by offering the possibility to submit contracts for prior approval. The tax authorities then published model agreements that had been approved by them on their own website. By using any of these approved ‘model agreements’, parties could be fairly certain that the tax authorities would classify the arrangement as a contract for services rather than an employment agreement. The system however wasn’t foolproof, particularly because it’s not only how the agreements between the parties are documented, but also how they are implemented in practice (besides, the tax authorities were also unable to manage the influx of applications effectively). In September of this year, the tax authorities announced that they would no longer approve and/or publish model agreements.
When the tax authorities resume enforcement against false self-employment per 1 January 2025, organizations that have wrongly opted for a freelance-construct may face back assessments for unpaid taxes and social premiums, as well as fines.
Back assessments can be imposed retroactively, but not further back than 1 January 2025. This is different if, in the opinion of the tax authorities, there is evidence of malicious intent or if instructions from the tax authorities have not been followed. In that case, the tax authorities can impose back assessments up to five years retroactively. For fines, there is a transition period of one year, during which employers and workers will not receive a penalty if they can prove that they are taking steps against false self-employment.
The tax authorities will therefore again check on false self-employment. But in the meantime, the reason why the enforcement moratorium was initially established in the first place still hasn’t been resolved. Therefore, choosing the right contract form can still be challenging, while the tax authorities will sanction a wrong choice. For more information on the distinction between the two contract forms, see our blog ‘Employee or freelancer? ’.
The bill for the Law on clarification of the assessment of Employment Relationships
As mentioned, a bill has been submitted for a new law aimed at preventing false self-employment: the ‘Wet Verduidelijking Beoordeling Arbeidsrelaties en Rechtsvermoeden’ , (Law on Clarification of the Assessment of Employment Relationships and Legal Presumption), in short: ‘Wet VBAR’) The Wet VBAR provides a clearer framework for distinguishing between contracts for services and employment contracts, clarifying the rather open norm in the Civil Code. The intention of the Wet VBAR is for parties to better assess their legal position and thus determine the appropriate contract form.
In the new Wet VBAR, the criterion of ‘authority’ is further defined; one of the three criteria for an employment contract (also see our blog ‘Employee or freelancer?). Additionally, the Wet VBAR introduces a legal presumption: if the remuneration for the worker is less than € 33 per hour, it is assumed that an employment contract exists (unless proven otherwise). The rationale for introducing this legal presumption is to protect self-employed individuals at the lower end of the labor market from exploitation and false self-employment.
The intended date for the entry into force of the VBAR Act was initially 1 January 2025. That date will not be met, and the current aim is for the law to come into effect a year later, on 1 January 2026. However, that also seems unlikely at this point, as the Raad van State, the formal advisory council of state, issued a negative opinion on the legislative proposal on November 7. Therefore, it remains to be seen whether and in what form the law will ultimately be enacted.
Tips for freelancers and organizations working with them
We advise freelancers and organizations that work with freelancers to review whether the correct contract form has been chosen in the short term – and in any event before 1 January 2025. This is not always straightforward, as the legal framework is quite open, and all circumstances of the case must be taken into account in the assessment. We have explained this in our blog ‘Employee or freelancer?’
If the relationship between the parties is merely a contract for services on paper, but in reality qualifies as an employment contract (for example, because the freelancer is doing exactly the same work as the regular staff and must adhere to the same rules), we advise reviewing in the short term – and in any case before 1 January 2025 – whether the agreement can be mutually converted into an employment contract. Agree on when the change will take effect and whether it will have retroactive consequences. In some cases, a collective labor agreement may need to be followed.
Moreover, it is also important to choose the correct contract form before 1 January 2025. The current enforcement moratorium only pertains to enforcement by the tax authorities. This means that self-employed individuals (even before that date) could assert in a civil procedure that they are, in fact, not self-employed but employees. This also applies to pension funds, which can enforce in a procedure that self-employed individuals are actually employees for whom pension contributions should have been paid.
Questions?
If you have any questions about the above, please feel free to contact Klaartje Stalenhoef one of Penrose’s employment law specialists, via k.stalenhoef@penrose.law or +31 20 27 00 710. We would be happy to assist you, for example by determining whether it is wise to continue hiring a freelancer after 1 January 2025, Or whether it is wise to continue working as a freelancer yourself.
