In earlier blogs we wrote about the uncertainty surrounding the Assessment of Employment Relationships (Deregulation) Act (Wet deregulering beoordeling arbeidsrelatie, or Wet DBA), the act that regulates the relationship between clients and self employed workers without staff (ZZP-ers). Because of this uncertainty the enforcement of the act was postponed until in any event 1 July 2018, with the exception of so-called “malicious parties”.

It is stated in the coalition agreement that the Wet DBA will be replaced with a new act that (i) must offer clients of genuine self employed workers without staff certainty that there is no question of an employment relationship; and (ii) must prevent bogus self-employment.

Enforcement deferred further

At the end of last week the Minister of Social Affairs and Employment, Wouter Koolmees, announced in a letter that the aim is to have the measures in the coalition agreement come into force on 1 January 2020: an ambitious aim given the complexity of the issues. The enforcement of the current legislation will be deferred until this date. And so the uncertainty continues.

Evident malicious parties vs. other malicious parties

In anticipation of the new act Minister Koolmees wants to intensify enforcement with regard to malicious parties from 1 July 2018. The Tax Administration will currently only enforce the act in the case of the most serious cases; the “evident malicious parties”. These are cases involving wilful misconduct or fraud, or situations that lead to serious unfair competition, economic or social disruption or exploitation.

From 1 July 2018 the Tax Administration can also enforce the act in relation to “other malicious parties”. These are parties who deliberately allow a situation of evident bogus self-employment to arise or continue, while they know or could have known that there is in fact an employment relationship.

The question is to what extent this will have an effect. After all, the Tax Administration has to prove that there is a situation of:

  1. a (fictitious) employment relationship;
  2. evident bogus self-employment; and
  3. wilful bogus self-employment.

The Tax Administration can only enforce the act when these three cumulative criteria are met. Given that the jurisprudence in respect of the first question does not give an unambiguous answer, it is not clear when there is a situation of evident or wilful bogus self-employment. Minister Koolmees does not clarify this in his letter. So the bar is set high for the Tax Administration with regard to this enforcement, and so this intensification of the enforcement looks like a “paper tiger”. We will have to wait and see how the Tax Administration deals with this in practice.

How to act in practice?

The uncertainty for clients in relation to hiring self employed workers without staff continues, in any event until 1 January 2020. So we advise clients to continue to act within the framework of the Wet DBA and to go through the following steps when hiring self employed workers without staff:

  1. Establish for yourself that there is no question of an employment contract, in which the criteria of “wages”, “performance of work” and a “relationship of authority” are met;
  2. If the conclusion is that there is no question of an employment contract, then specify this in a contract for professional services and rule out the fictitious employment relationship;
  3. If there is any doubt that there is a situation of bogus self-employment, then make use of a model contract and submit this to the Tax Administration for approval;
  4. Have the work actually carried out in the manner agreed in the contract for professional services.