On 28 March last, the Upper House of the Dutch Parliament approved a proposal for the Minimum Wage and Minimum Holiday Allowance Act (WML) also to apply to agreements for so-called services yet to be determined.

Background

Agreements for services are widely used as a form of contract for the self-employed and freelancers. This construction however became the subject of controversy some years ago, when it came to light that it was being used as a way of paying mail carriers less than the statutory minimum wage. By means of this legislative proposal, the Dutch government intends to provide greater protection to the self-employed and put an end to the circumvention of the statutory minimum wage.

As a result of the legislation, even contractors working on the basis of an agreement for services will in future be entitled to the minimum wage. According to (outgoing) minister of social affairs and employment Lodewijk Asscher, this will affect some 50,000 contractors.

Exception

Contractors who in tax terms are regarded as entrepreneurs will, however, not fall within the scope of the WML, as they normally execute work for several different clients and are thus, in the view of the government, less vulnerable.

Practical tip

For contracting parties who pay the statutory minimum wage (from 1 January 2017: € 1,551.60 for contractors as from 23 years of age) or more, nothing will change. However, contracting parties who wish to pay less than the minimum wage to the individuals working for them are well-advised to check whether a given self-employed person working for them is acting on the basis of an occupation or a business. This can be done by requiring them to prove that they have multiple clients and that they are acting as a self-employed person who actively solicits clients.