Cabinet wants to implement tighter rules on self-employment to protect workers

The Cabinet is going to tighten up rules to make it clearer when a self-employed person’s relationship with a client should actually be regarded by the courts as an employer-employee relationship. These rule changes are intended to prevent sham labor agreements while making it easier for the self-employed person to instead demand labor protections as a salaried staff member through the court system, if necessary.

By clarifying the rules and reducing the differences between the self-employed and people in paid employment, the focus should be on further preventing bogus situations where someone is forced to work as a freelancer. Enforcement is now only allowed under certain conditions and has hardly happened in recent years.

Hiring a self-employed person provides tax and financial advantages for companies, while also giving less security and protection to the self-employed person compared to salaried employees. The Cabinet primarily wants a more level playing field, by giving more protection to self-employed people without personnel, also known in Dutch as zzp'ers. Among the most important measures the Cabinet said it will introduce is a mandate to carry disability insurance.

Better rules should make it clearer when someone is considered “employed” and not a freelancer on contract. This will be worked out in the coming six months, in consultation with trade unions, employers and experts. "This only works if you know what is going on in practice and can translate that well into legal text," said Social Affairs Minister Karien van Gennip. The defining characteristics of an employment contract, and what that means in 2022 and 2023, must be better laid down in law. Important rules about this are linked to labor laws dating back to 1907, the Cabinet emphasized.

It is especially important that a contractor who is paid below a certain hourly rate, such as 30 euros, be able to approach a client more easily to indicate that an employment contract should exist instead of a contractor arrangement. The company must then really be able to indicate why this is not the case, or hire the self-employed person. If this does not happen, the worker should then be able to take the matter to court.

The Cabinet acknowledged that this is a big step, but thinks that the first lawsuits can have a wider impact on other employers and self-employed people. The clear agreements must above all have a preventive effect, and dissuade companies from setting up sham constructions themselves.

Bogus constructions lead to unfair competition, and companies in particular are the ones who benefit. Because the current law does not properly tackle the issue, authorities do not enforce rules against sham constructions in many cases. This must be the case again from 1 January 2025.

The Belastingdienst, the country’s tax and customs office, is already using more existing resources to ensure that the option to hire self-employed persons is not abused, emphasized State Secretary Marnix van Rij, who handles taxation policy for the Cabinet. But enforcement must really be the final piece, he emphasized. The Cabinet wants to focus much more on preventing bogus constructions from arising as much as possible.