Dutch scraps plans for forced minimum hourly rate for freelancers

The government decided against implementing a statutory minimum rate for freelancers, as proposed by Minister Wouter Koolmees of Social Affairs and Employment. According to the government, the proposal would lead to too high an administrative burden for freelancers or self-employed without any staff, NOS reports.

The proposal by Koolmees stated that freelancers and self-employed with no staff should get a minimum of 16 euros per hour, to prevent them being underpaid. And that those who charge more for their services would have to submit a statement to show that they are indeed a self-employed person with no staff working for them.

A part of the proposal that the government will implement is a so-called web module that is intended to show whether the Tax Authority would consider a freelancer hired by a company as a freelancer or an employee, based on the job they will have to do. This is so that companies can know beforehand whether they will have to pay wage tax or employee insurance for the person.

But there is a lot of criticism on this web module. According to NOS, in the first test phase the web module could only say with certainty in 25 percent of the jobs described that the workers will be able to work as a freelancer. In 27 percent of the cases, the web module could not give a definitive answer because the circumstances of the work were too specific. In 48 percent of the jobs, an employment contract would likely be needed because the freelancer would be considered an employee due to the nature of the agreements and activities.

According to Margreet Drijvers of the Self-employed Entrepreneurs Platform, this web module will be as good as useless as long as the underlying legislation is so complicated. Even judges rule differently on the same job. "And the questions fired at clients are so complicated that they can hardly answer them," she said. "As long as the underlying legislation is not changed, determining the employment relationship will always be complicated."