The DBA Act was intended to help distinguish between genuine contractor arrangements (where the contractor is self-employed) and disguised employment. However, enforcement of this law has recently been postponed due to government plans to replace it.

The new proposed legislation regulating self-employment in the Netherlands will be designed to offer protection for the lower levels of the labour market, while also giving opportunity to entrepreneurs at the top of the labour market. With the proposed measures, the government also intends to offer more clarity to employing entities and the self-employed.

The proposed legislation includes the following measures:

• A minimum (hourly) rate of EUR 16 for self-employed individuals. According to the government, the introduction of this minimum rate will prevent self-employed workers from being hired at a rate lower than the minimum rate. With the minimum rate, the self-employed can provide for their essential needs.

• At the top, self-employed persons will be protected by a self-employed persons declaration. This provides certainty in advance about their liability for payroll tax and employee insurance. To the extent possible, this statement will also provide certainty about employment consequences, pension obligations and collective agreement provisions. This offers entrepreneurs greater certainty working outside a more traditional employment contract, which gives them more room to do business.

For organisations that employ self-employed individuals without employees, a so-called ‘client’s declaration’ will be created. This is an instrument to obtain certainty in advance about wage tax, employee insurance premiums and the contribution to the Healthcare Insurance Act payable. This client statement can be obtained after filling in a number of questions using a special web module. This web module will, based on legislation and existing case law, analyse the employment relationship and indicate whether or not there is an employment contract.

The government is currently working on drafting legislation that will put these plans into action. The aim is to publish this legislation online for Internet consultation in the third quarter of this year.

In the meantime, enforcement of the DBA Act is postponed until 1 January 2021. Until that time, the Tax Authorities may give instructions to employing entities in respect of which they consider that the qualification of the employment relationship does not comply with current legislation. From 1 January 2020, the Tax Authorities have the option to take enforcement action if an employing entity does not comply with these instructions.