Freelancers earning below EUR33 per hour could be deemed employees by new Dutch law
Netherlands Prepares Third Attempt at Defining Employment Relationships
The Dutch government is once again trying to provide much-needed clarity on the distinction between employment and self-employment with a new law, the “Wet verduidelijking beoordeling arbeidsrelaties en rechtsvermoeden” (VBAR), or the Act on Clarification of the Assessment of Employment Relationships and Legal Presumption. This follows two prior attempts – the “Wet Deregulering Beoordeling Arbeidsrelaties” (Wet DBA) and its proposed replacement – which failed to provide the intended clarity, it has been reported.
Key Features of the VBAR
According to reports, the VBAR introduces two key elements that could significantly impact the Dutch labour market. Firstly, it proposes an automatic presumption of employment for contractors earning below an hourly rate of approximately €33. “This element makes it easier for workers to enforce an employment contract,” stated law firm Osborne Clarke in an update. “If the worker can demonstrate that they earn less than the applicable hourly rate, it is up to the employer to prove that there is no employment agreement,” it was reported.
Secondly, it establishes a structured three-step test to assess the nature of the working relationship. The three steps include examining the client’s control over the work, the integration of tasks into the employer’s core activities, and the financial risks borne by the worker.
Potential Impact on Freelancers and Businesses
These provisions could lead to increased scrutiny of contracts and working conditions, particularly for freelancers earning below the proposed threshold. Businesses may be required to reclassify some contractors as employees, thus providing them with employment rights and benefits. This could result in additional costs for businesses but also provide greater security for workers.
Staying Informed
While the VBAR is not expected to come into effect before January 1, 2026, it is important for employers and contractors to stay informed about both the Wet DBA and the VBAR to ensure compliance. Staying informed by checking the Dutch Tax Administration’s website for updates can help ensure compliance and avoid potential legal challenges and financial penalties.
