Netherlands’ Modern Self-Employed Persons Act: What Clients and Freelancers Need to Know
The Netherlands is implementing significant changes to its regulations surrounding self-employment, aiming to combat false self-employment and provide clearer frameworks for hiring freelancers. The new Self-Employed Persons Act (Wet zelfstandigenbeoordeling arbeidsrelaties – VBAR), expected to take effect on January 1, 2026, introduces a legal presumption of employment for workers earning under €36 per hour and strengthens the concept of external entrepreneurship.
What is False Self-Employment?
False self-employment occurs when a worker is classified as self-employed (a freelancer) but, in reality, functions as an employee. This misclassification can deprive workers of crucial protections afforded to employees, such as dismissal protection and benefits during illness. Employers may utilize false self-employment to circumvent the stricter regulations associated with employing staff.
Why the VBAR Act?
The VBAR Act is a response to growing concerns about the prevalence of false self-employment and its negative consequences, including unfair competition and reduced worker protections. The legislation builds upon existing case law, including rulings from the Supreme Court regarding Deliveroo and Uber, which have provided guidelines for assessing employment relationships . The tax authorities have also been actively enforcing against false self-employment since January of this year.
Key Elements of the VBAR Act
The VBAR Act introduces three key elements:
- Legal Presumption of Employment: Workers earning less than €36 per hour will be presumed to be employees unless they can demonstrate sufficient evidence of genuine self-employment.
- Strengthened External Entrepreneurship: The law reinforces the criteria for establishing genuine external entrepreneurship, requiring freelancers to demonstrate a higher degree of independence and control over their work.
- Codification of Case Law: The VBAR Act codifies existing Supreme Court rulings on false self-employment, providing a clearer legal basis for assessing employment relationships.
What Does This Mean for Clients?
Clients hiring self-employed individuals need to critically evaluate their working arrangements to ensure compliance with the VBAR Act. This includes carefully documenting the nature of the relationship, the freelancer’s level of independence, and the terms of the agreement. Taking a proactive approach to assessing these collaborations is crucial.
What Does This Mean for Freelancers?
Freelancers, particularly those earning under €36 per hour, should be prepared to demonstrate their genuine self-employment status. This may involve providing evidence of their independent business operations, control over their work, and financial risk.
Looking Ahead
The implementation of the VBAR Act marks a significant shift in the Dutch approach to self-employment. Both clients and freelancers should familiarize themselves with the new regulations and take steps to ensure compliance. The law is expected to lead to a more transparent and equitable labor market, protecting workers’ rights while fostering a healthy environment for genuine entrepreneurship.