HeadFirst Group organizes knowledge session for SGP parliamentary party
HeadFirst Group organizes knowledge session for SGP parliamentary party
On Thursday, March 16, HeadFirst Group, in cooperation with our partner ONL voor Ondernemers, organized a knowledge session for the SGP parliamentary party. On behalf of the SGP, Chris Stoffer (MP) and Arnold van Huizen (policy officer) were present. In the past, HeadFirst Group has organized more knowledge sessions for MPs and policy officers. During the knowledge sessions we reflect on the services of HeadFirst Group and what role and added value an HR service provider has in the (flexible) labor market. In addition, we take the MPs and policy officers into relevant developments in the labor market regarding the zzp-dossier and which challenges and bottlenecks we experience in legislation and regulations. Besides a HeadFirst Group delegation, an independent professional and a representative of one of our clients were also present. They gave a short presentation on why they use our services as client and contractor and where the added value of HeadFirst Group lies for them.
All in all, it was a very successful session and we were able to provide the SGP Parliamentary Group with the necessary information and knowledge. We would like to thank our cooperation partner ONL voor Ondernemers for their hospitality and the attendees for their sharp questions and the discussion we had. Through this type of knowledge session, we try to put ourselves in the limelight as a professional discussion partner and make a valuable contribution to the labor market and self-employed workers file.
If you have any questions about our knowledge sessions as a result of this post, please contact Sem Overduin, Public Affairs Officer at HeadFirst Group. Sem can be reached at Sem.Overduin@headfirst.nl
Frequently asked questions outline 'Progress letter on working with and as self-employed(s)'
Are you already familiar with the three tracks that the government has devised to restore balance to the current labor market? What plans and proposals are there for the future of working as and with freelancers? Public Affairs Officer Sem Overduin and Business Development Director Paul Oldenburg gave all the ins & outs on this during a webinar. From the many questions asked during the session, it became clear how much the subject is of interest to self-employed people and clients. We share the most common ones below.
- How will the self-employment deduction continue to be phased out?
In the Coalition Agreement 2021-2025 it was agreed to accelerate the reduction of the self-employed deduction. This scheme will be reduced to €1,200 in 2026 and further reduced to €900 in 2027. The self-employed deduction for starters, the starter's deduction, will remain unchanged. However, self-employed people will be compensated during this cabinet period with an increase in the labor discount. With this measure, the cabinet wants to reduce the differences in tax treatment between employees and the self-employed. More information about the self-employed deduction and the steps that will be taken in the coming years can be found here.
- Why is the Fiscal Old Age Reserve (FOR) being abolished?
Since Jan. 1, 2023, you can no longer build up a retirement reserve. The government abolished it to prevent entrepreneurs from using the fiscal old-age reserve to obtain tax deferral. The old-age reserve built up until December 31, 2022, can still be settled according to the current rules. This means that it can remain on the company's balance sheet and can be used in the future to negotiate a qualifying annuity, or it must be settled no later than when the company ceases operations. Also with these measures, the government wants to ensure more equal taxation between employees, self-employed persons and shareholders.
- How is the element of "self-employment" further implemented?
Current case law looks at contraindications to the existence of an employment contract. Some of these are included in the Payroll Tax Handbook. Some examples are (1) the performance of work on the basis of a result obligation, (2) specific knowledge and expertise of the worker that employees within the organization do not have, and (3) that the worker receives substantially higher remuneration than employees doing similar work in salaried employment. In the coming period, it will be worked out with social partners, experts and stakeholders which facts and circumstances indicate self-employment and how these contraindications can be given weight in assessing the employment relationship.
- What is the current status of the enforcement moratorium?
In the period January through October 2022, 275 company visits and 200 book audits were conducted on the qualification of the employment relationship. Partly because of the limited quantitative capacity and the complexity of assessing the employment relationship, it is complicated for the Tax and Customs Administration to take effective action on false self-employment. On the other hand, additional staff have been trained and the Tax and Customs Administration currently has 80 FTE for enforcement.
- What plans does the Cabinet have for the enforcement moratorium?
In the Cabinet' s response to the reports issued by the Netherlands Court of Audit and the National Audit Authority, the Cabinet expressed its ambition to improve this enforcement in the short term and to lift the enforcement moratorium entirely by January 1, 2025 at the latest. In the run-up to January 1, 2025, the Tax and Customs Administration will devote extra attention to communication about enforcement. This will include the consequences for principals and contractors of the intended abolition and the (financial) risks they run.
- What if an audit reveals (fictitious) employment but no malice?
Then the Internal Revenue Service will issue directions that you can work on. Client and contractor are usually given three months to follow the directions. If this is not sufficiently followed, the Tax Office will impose correction obligations and additional tax assessments.
'Progress letter on working with and as self-employed(s)' - three outlines explained
Karien van Gennip, Minister of Social Affairs and Employment, released on December 16, 2022 the 'Progress letter working with and as self-employed(s).' shared with the House of Representatives. The letter builds on the outline letter labor market of July 5, 2022. The minister sets out all plans along three lines: a more level playing field, clarification of the assessment of employment relationships, and improvement of enforcement on false self-employment.
The labor market is in need of maintenance. The group of self-employed workers has grown in recent years and this growth is expected to continue. The government signals that this leads to limited protection against disability, less control over working conditions and inadequate supplementary pensions. Especially among vulnerable self-employed people. In addition, there is much uncertainty about the applicable rules. Therefore, the government wants to address the problem with measures along three lines:
- A more level playing field - Targets all forms of contract with respect to social security and taxation. To achieve this, the self-employed deduction will be accelerated, from €6,310 in 2022 to €900 in 2027. In addition, the minister proposes to phase out the fiscal old-age reserve (FOR). The fiscal reserve does not provide the certainty of actually enjoying one's retirement income. Phasing out also prevents the use of the FOR for tax deferral and forces the self-employed to place real old-age provisions outside their company. If it is up to the cabinet, there will also be mandatory disability insurance (AOV) for the self-employed. More information on this will follow in the first quarter of 2023.
- Clarifying the assessment of employment relationships - The clarification of the assessment should make it easier to agree on the correct legal form of an employment relationship right from the start. The Cabinet therefore wants to give substance to the open norm of "working in the service of" (Art. 7:610 BW). The emphasis is on the classic elements of subordination, such as giving instructions and supervising. The Cabinet adds that 'working in the service of' is also at issue if the work is organizationally embedded in the employer's company. In addition, whether there is self-employment becomes important. The element of self-employment may be an important contraindication to the existence of an employment contract. These three main elements and their interrelationships will be further elaborated in the coming period.Furthermore, a rebuttable legal presumption of an employment contract must be established to support the bargaining position of employed persons. The civil law presumption of employment will be based on an hourly rate to be determined. It will be up to the worker to prove that there is no employment contract. If the worker and employer cannot agree, the worker can go to court. Also, the web module labor relations assessment will be further developed to comply with the new laws and regulations.
- Improve enforcement on false self-employment - On January 1, 2025 at the latest, the enforcement moratorium must be lifted. The Cabinet considers enforcement necessary for a future-proof labor market and a sustainable tax and social security system. The central premise of the Tax and Customs Administration's strategy will be that citizens and businesses "comply with rules of their own accord as much as possible, without compelling and costly actions on the part of the Tax and Customs Administration." In this regard, the Tax Administration considers good cooperation between the market and the Service to be of great importance. An important part of the new approach is the streamlining of internal and external communication regarding enforcement. In addition, the possibility of organizing preliminary consultations at branch level is being explored, so that the situation becomes workable for the branches and the Service.
Details will be worked out in the coming months. In doing so, there will be room for the social partners and the market to contribute ideas. The plan is to schedule a debate on this parliamentary letter in the first quarter of 2023. Then a draft bill will be presented to the market through an Internet consultation. After the summer, the minister plans to send it to the Council of State so that the final proposal can be presented to the House in early 2024. The aim is to publish the legislation by January 1, 2025. This fits well with the lifting of the enforcement moratorium on the same date.
What will be Minister Van Gennip's next move?
Tomorrow afternoon the Labor Market Policy Committee debate is scheduled. On the parliamentary agenda are a number of important topics, such as the report of the Borstlap Commission and the Labor Market Outline Letter of July 5. Ahead of the debate, Marion van Happen is happy to share her views on the current proposals on the table in political The Hague.
First of all, I would like to emphasize that I am positive about the first outline letter from the Minister of Social Affairs and Employment. The three tracks mentioned - the level playing field, regulatory clarification and improving enforcement - are the right knobs to turn. If seen and dealt with in conjunction, I see the contents of this letter as a step in the right direction.
Established criteria supplemented by sectoral approach
I welcome the attention given to the Belgian Labor Relations Act in the outline letter. The thinking and underlying principles offer an opportunity to replace the DBA law. The Labor Relations Act establishes clear legal criteria for determining whether one is an employee or a self-employed person. Criteria have also been established at the sectoral level for sectors and professions where the likelihood of underpayment or vulnerable entrepreneurship is greatest. This approach increases the effectiveness of enforcement and does more justice to the diversity of self-employed workers.
What also makes enforcement more effective and targeted is the SER's MLT recommendation to introduce a legal presumption of employment below the hourly rate of €35. The SER's proposal thus distinguishes between vulnerable self-employed people and self-reliant self-employed people. This allows the tax authorities to focus on the sectors and professions where self-employed workers are hired under this rate. Clear and legally defined criteria plus a sectoral approach are a good starting point as far as I am concerned.
Embedding in the organization
Then I'll jump to the authority criterion, surely a hot topic in this dossier. In my opinion, this is the crux of the discussion: when can an organization hire a self-employed person for a particular job and when is it an employee? For various reasons, the DBA law has failed to provide this clarity. That the Cabinet recognizes this and is working toward replacing it is crucial.
The Borstlap Commission proposes to modernize the authority criterion by making "embeddedness in the organization" more central to the assessment of the employment relationship. I am not in favor of giving this criterion more weight, because there is already enough debate over the interpretation of when authority exists. When is a worker "embedded in the organization"? And what tasks belong to "the regular work of an organization"? In practice, I see just the opposite happening. Hybrid teams with different specialists working on a project basis on solutions and issues of importance to the organization at that time. These are often teams where there are different forms of contracts. The results of the recently published CBS survey support this picture: employers consider the "type of contract" much less important than previously thought. Factors such as knowledge, expertise and work experience are much more important. Will this soon no longer be possible if we deal too rigidly with authority and embedding in the organization?
Great diversity zzp population
In addition, I question the modernization of one general authority criterion. After all, in the Netherlands we are dealing with a very diverse self-employed population. This group of workers has diverse assignments, works for different hourly rates and the duration of assignments is also very different. One authority criterion for this entire target group will therefore not work in my view. We need more customization.
The web module, in its current form, also does not sufficiently take this diversity into account. It only tests for the aspects of being an employee and does not sufficiently take into account aspects of being self-employed. As a result, the arrow can only move in one direction and that is the direction of "indication of employment.
In the recent budget of the Ministry of Social Affairs and Employment, I read back that the web module is being further developed to provide clarity on the nature of the employment relationship. To make the web module somewhat operational and reliable, I recommend that the questions and assessment also take self-employment into account. This will result in more balance in the answers.
Clear rules first, then enforcement
With regard to enforcement, I read back that enforcement will resume on January 1, 2025. I agree that enforcement needs to be started. The way in which and how this will be rolled out, I still see some bumps in the road. The coalition of industry associations states in their joint letter - quite rightly, by the way - that enforcement will only be effective if the ground rules and criteria are clearly established at the front. For all parties involved - the Tax Office, intermediaries, principals and zzp'ers - this must be clear. My appeal to The Hague is therefore: take the outstretched hand of the industry associations and enter into discussions with implementing organizations about enforceable criteria. Let us as intermediaries be an extension of the implementers. We are pre-eminently the parties in the labor market with knowledge and expertise.
In the coming months we will keep a finger on the pulse and remain involved in relevant developments. At the end of this year I expect more clarity about the next step with the second outline letter and a progress letter 'Working on a self-employed basis'. As the largest HR-tech service provider, we will of course remain in dialogue with our stakeholders in The Hague and will pull together with our partners.
Minister of Social Affairs and Employment puts dot on horizon, follow through now much needed
Minister Karien van Gennip (Social Affairs and Employment) has shared the Labor Market Outline Letter with the House of Representatives. This is the next step in making the labor market future-proof. It is important to outline clear frameworks for the self-employed, clients, intermediaries and implementing organizations immediately after the summer recess. A Labor Market Policy Committee debate is scheduled for Thursday, September 8, an appropriate time to follow up on the contents of the letter.
Role of flex in the labor market
It is good to read that "flexible labor plays a useful role in the labor market. This recognition is correct and corresponds to daily practice. The right degree of flexibility is good for the labor market. It allows organizations to move flexibly with economic and social developments. At the same time, partly unjustifiably, there is also attention for the lesser aspects of flexible work. Obviously, politicians are looking for the right balance, but the discussion about flexible work needs to be placed in perspective with the right nuance. The Self-Employed Labor Survey (ZEA) 2021 shows, among other things, that the lion's share of flexible workers, mainly self-employed, are very satisfied with their working conditions and consciously choose to do so. A factual discussion is crucial to arrive at solutions that actually support the workers who need them.
Labor relations act and SER opinion
The replacement of the DBA law plays a major role in the zzp dossier. The fact that the Outline Letter pays specific attention to the Belgian Labor Relations Act and the MLT opinion of the SER makes me feel positive. In previous position papers, reports and discussions with stakeholders in The Hague, we have fully committed to the Belgian model. As a result, it is now on the political and official agenda. The legal presumption of employment for vulnerable workers below the hourly rate of €35 (MLT advice from the SER) is also a step in the right direction. I agree with the government's position that it can strengthen the position of vulnerable people in the labor market. Whether the Tax and Customs Administration and the UWV can actually implement it is the question, because here too it is ultimately about reliable and good implementation.
Sufficient freedom the higher end
If the government maintains a focus on sectors where the risk of underpayment is greatest, the intermediary industry will be given the responsibility to ensure that the higher end works optimally. This requires clear agreements with independent professionals and clients. I will gladly continue to seek that cooperation with the government.
8 variants for replacing the DBA law
The hot topic: employee unless...
On Thursday, June 30, the Social Affairs and Employment Committee will debate the zzp dossier. Ahead of this debate, ZiPconomy published the report 'Employee, unless ... 8 variants for the replacement of the DBA law' this morning. Packed with interesting insights and a clear overview of the different variants on the table. "We hope that based on the contents of this report a substantive and qualitative debate will be held," said Marion van Happen, CEO of HeadFirst Group.
Different schools of thought brought together
The role and position of the self-employed on the labor market has long been the subject of debate in the Netherlands. The issue: when is someone who performs work for pay an employee or a self-employed person? Previous cabinets have failed to clarify this and several plans have failed for various reasons. In addition, several reports have been published with proposals to move the discussion forward. Ranging from enforcement of existing rules to sweeping legislative changes.
"This report offers a clear overview of all the different proposals made in recent years to replace the DBA law. More importantly, the advantages, disadvantages and consequences for the self-employed and clients are detailed. By combining these insights with the correct facts and figures about the self-employed, politicians in The Hague can come to a well-considered decision."
Take labor market situation into account
Two elaborated variants, including the Borstlap Commission's proposal to make "embedding in the organization" leading in the distinction between employee and self-employment and the ABC test from California, have heavy impact on the freedom of self-employed workers and clients. Given the current tight labor market, it is important not to underestimate these impacts. Employers and clients are crying out for talent and are pulling out all the stops to retain the current population. "That there should be clear rules and frameworks when someone can be hired as a self-employed person, I completely agree. On the other hand, too rigid rules are not desirable, because practice shows that the form of contract is becoming less and less decisive. It is therefore important to deal carefully with laws and regulations concerning work and not to restrict workers too much in their choices," says Van Happen.
Belgian model good alternative
The report also highlights the Belgian model with the Labor Relations Act. This model - also described in the report 'Independence, flexibility and social security. A look across the border.' - has many advantages. Van Happen says: "In Belgium, the issue of false self-employment is effectively combated by (1) having a clear set of criteria as to whether a person may perform an assignment as a self-employed person, (2) looking more at the aspects of entrepreneurship and (3) having stricter rules in sectors where the risk of underpayment or vulnerable workers is high. That combination of factors works well in Belgium, so it is interesting to investigate whether we can adopt the positive aspects and improve the less good aspects in the Netherlands."
The legislation in Belgium has now also been noticed in Dutch politics. During the debate on labor market policy on April 13, Minister Karien van Gennip explicitly referred to the situation in the South's neighbors, and MPs Smals (VVD) and Palland (CDA) earlier also called attention to it.
And now?
For now, it is not clear what the next step will be from Minister Van Gennip. Last Thursday, Parliamentary questions about enforcement of the DBA law were answered by the minister. Before the summer there will be an outline letter to the Lower House about the elaboration of the labor market package. Finally, there will be a response to the report of the Court of Audit before the ZZP debate on June 30. HeadFirst Group follows the developments closely and stays in close contact with MPs and policy staff.
The full report is available for free download here.
Hague update: directives from the EU and a headline debate on the labor market
The new cabinet has been in place for some time now, there is an ambitious coalition agreement on the table, and the new ministers have settled in reasonably well. This is noticeable in The Hague. Officials are busy writing policy plans and the Lower House is also regularly debating. A good time to briefly take you through the most important events and developments of the past few weeks.
EU proposal platform work
It is clear that Brussels is becoming more and more explicitly involved in national affairs and issues. Not entirely surprisingly, last December the European Commission came up with a proposal to better protect platform workers. Patience with Uber and Deliveroo has been running out in Brussels for quite some time, and in the new directive, the European Commission demands that platform workers be given the same rights and obligations as employees. Since the issue of platform work plays out in several European countries, Brussels is now picking up the gauntlet to come up with clear guidelines and criteria to clarify the qualification of the employment relationship.
The proposal sets out five criteria for determining whether an employee is an employee or a self-employed person. These are as follows:
1. The platform determines the remuneration of the worker;
2. The platform sets requirements for the appearance of the worker (for example, he must wear a uniform); 3;
3. The platform monitors the worker's performance through digital means;
4. The platform determines working hours;
5. The platform limits the worker's ability to work for others.
Should it remain in practice that there are two or more criteria, it will be up to the platform to prove that there is still a zzp'er rather than an employee. According to European Union calculations, this will have a major impact on the Dutch treasury, as billions in tax revenue and social security contributions can be benefited.
Now, there are some fundamental questions that need to be asked about this proposal and the whole discussion about platform work. For what exactly is the definition of a platform? And is this proposal only about tackling false self-employment among platform workers, or is this proposal about the mediation and classification of self-employed workers in general? In any case, last weeks it became clear that all political parties agree that this proposal is going to have an effect on the self-employment issue in the Netherlands. The discussion about when a self-employed person is really self-employed has been going on in the Netherlands for a long time and many attempts to clarify this have failed and have been put on ice. This fatigue is an extra reason to be alert, because The Hague should not accept this proposal too easily and should clearly guard the line between vulnerable platform workers and true self-employed workers. It is likely that public bodies such as the Tax Office and the Labor Inspectorate will be allowed to use these criteria to test and enforce the presumption of employment. This immediately indicates that the proposal is not only aimed at protecting the vulnerable platform worker, but that it also gives public law bodies tools to start enforcement. We will therefore need to monitor developments closely and inform Chamber members of our interests and concerns as early as possible.
Mainline debate Social Affairs and Employment
On Thursday, February 17, the Parliamentary Committee on Social Affairs and Employment debated the plans in the coalition agreement with the new ministers of Social Affairs and Employment. Various themes were addressed in the debate and with 19 political groups, it went in all directions at times. Fortunately, the debate also focused on topics that are important to us, such as the web module, the enforcement moratorium and clarity regarding the hiring of the self-employed.
Prior to the debate, we as HeadFirst Group provided input and asked several members of parliament to provide more clarity on the further development of the web module and enforcement of the DBA law. It was good to see that parties returned to this during the debate. The market is yearning for clear and enforceable rules after all these years.
Although the minister did not answer our questions directly, there were certainly some bright spots. For example, the minister himself indicated that only a small percentage of workers on the labor market are 'vulnerable self-employed' and that we should focus on those sectors where the chance of false self-employment is greatest. This interfaces with the Belgian model that we previously wrote a report about with ZiPconomy and ONL, and we have also been advocating sectoral enforcement for some time. The minister has also promised to come up with a "broad plan" on labor market reform before the summer and to outline this in a letter and share it with the House of Representatives.
Internet consultation 'Self-employment minimum wage act' launched
Monday, October 28, Minister Koolmees of Social Affairs and Employment, State Secretary Snel of Finance and State Secretary Keijzer of Economic Affairs and Climate announced an internet consultation. It concerns two parts of the proposals announced by the Cabinet to replace the DBA Act; the minimum rate of self-employed workers and the self-employment declaration.
Measures as of Jan. 1, 2021
The first measure relates to the lower end of the market and means that self-employed workers must earn a minimum of €16 per hour. This minimum rate applies to all the hours a self-employed person spends on an assignment. This takes into account spending on other work, such as administration. Direct costs, such as materials, are excluded. Zzp-ers who earn less than the minimum rate are not considered self-employed, but as employees of the client.
The second measure is the self-employment declaration. This is intended for self-employed people with a rate of at least €75. It allows them to agree in advance with the client that they are self-employed. Registration with the Chamber of Commerce is required to use the self-employment declaration. If the conditions are met, the self-employed and clients run no risk of having payroll tax and social premiums withheld for up to one year. In addition, they get as much certainty as possible about labor law consequences.
Web module not included
The web module, which self-employed people can start using in other cases, is not mentioned in this draft bill. In fact, no legislative amendment is needed for that. However, the questions from the web module have been tested with clients and trade organizations. Because the draft version received a lot of criticism, the effective date of January 1, 2020 has been postponed. Processing the feedback not only takes a lot of time, but makes the development of the web module an even more complicated puzzle.
Internet consultation
The Internet consultation means that the draft bill will be open for feedback for six weeks - until Monday, Dec. 9. Based on this feedback, the bill can be prepared for advice from the Council of State and then for submission to the House of Representatives. The Internet consultation can be found here.
Stop the web module: time for reform instead of sticking band-aids
Last Monday, outgoing Minister Koolmees of Social Affairs and Employment informed the Lower House by means of the seventh progress letter 'Working as a self-employed person'. In this letter special attention was given to the pilot results of the web module, the online tool with which clients can determine whether they can hire a self-employed person for a specific assignment. Within a short period of time, industry associations, zzp-interest groups and trade unions criticized the results. For further decision-making and possible continuation of the web module, the ball is in the new cabinet's court.
HeadFirst Group believes it is unwise to further develop the web module. In an earlier phase of the web module, legal experts already criticized the tool. Now the evaluation of the pilot shows that in 28.4% of the cases the web module cannot give an opinion on the nature of the working relationship. "Unfortunately, the web module does not provide the clarity and clarity that clients and self-employed workers have been asking for for years. A new cabinet would be wise not to further develop the web module. Implement real reforms instead of just sticking band-aids," said Han Kolff.
Current web module not suitable for intervention
In the letter, Koolmees announces that the questionnaire specifically intended for intermediary situations has not yet been completed. This means that the web module is not suitable for self-employed people who work through an intermediary. The most recent Self-Employed Labor Survey shows that about 8% of the self-employed category have assignments or clients through an intermediary. Should the web module actually be introduced, agreement on the content and form of a questionnaire for intermediary situations must first be found in proper consultation with intermediaries and industry associations. The Bovib, the branch organization for intermediaries and brokers to which HeadFirst Group is also affiliated, reports on its own website that the talks with the Ministry of Social Affairs and Employment are proceeding with difficulty.
Time for serious reforms
A new administration must get serious about labor market issues and challenges. "The web module should not create regulatory pressure and uncertainty. The upper end of the flex market, consisting of conscious and autonomous independent entrepreneurs, functions much better if laws and regulations really give room to do business. This group satisfactorily makes clear agreements with clients and intermediaries."
The evaluation of the pilot shows that in certain sectors, such as the hospitality, transport and construction industries, the likelihood of an "indicative employment" outcome is highest. These sectors employ relatively more vulnerable self-employed workers with lower hourly rates. "The SER's advice to enforce hiring agreements below €35 per hour more strictly is a good starting point. Supervision and enforcement should focus on sectors where abusive zzp constructions are used. Trust that at the top of the market there is professional and good cooperation between clients and independent professionals, where intermediaries play a role to work in accordance with laws and regulations."
Finally, Kolff argues for a broad coalition of societal parties to discuss and think about a basic social system for all working people, for example for the consequences of disability. Earlier research by HeadFirst Group has shown support for such a system among independent professionals. "We still embrace the idea of a basic social system for all employed people in the field of disability, as proposed by the Borstlap Commission and the Social Agreement of ONL, VZN and AVV. If we create certainties around the individual rather than the form of contract, then the 'pressure' on the qualification question will decrease." To create a more level playing field between employees and the self-employed, the government has already begun by further and accelerated phasing out the self-employment deduction.
Seventh 'Self-employment' progress letter: web module to next cabinet, limited enforcement extended
On Monday, September 20, the outgoing Minister of Social Affairs and Employment and the outgoing State Secretary of Finance informed the House of Representatives about the state of affairs and the follow-up steps regarding the measures envisaged in the coalition agreement in the field of "self-employment. This letter pays special attention to the pilot of the web module and the question of what follow-up will be given to this online tool. Attention is also paid to the enforcement moratorium and other relevant measures are briefly discussed.
Web module pilot evaluation
On Jan. 11, 2021, the pilot of the web module, an online questionnaire that clients can fill out anonymously in order to get more clarity on the nature of the employment relationship, began. The web module is aimed at business clients who hire a self-employed person for a particular assignment. Over 6,600 completed the web module in full. The totality of the results were distributed as follows:
- In 33.9% of cases, the completed questionnaire provided an indication of employment;
- An indication of fictitious employment in 9.7% of cases;
- In 28% of cases, an off-duty indication;
- And in 28.4% of cases, no indication could be given.
The results of the web module differ greatly between sectors. For example, in the construction, hospitality and transport sectors, the outcome 'indication within employment' is many times higher in percentage terms than in the public administration and business services sectors.
It has previously been indicated that a subsequent cabinet must decide whether the web module will actually be introduced and, if so, what status the outcome will have (legal certainty or not). Prior to making a decision, a test will be conducted into the implementation consequences for both the variant in which the web module is only used as an information tool and the variant in which it must offer (more) certainty to principals.
Intervention questionnaire not yet completed
In a previous progress letter it was announced that a questionnaire will also be developed specifically for situations of intervention. In the latest letter, the ministers indicate that it has proved complex to draw up a questionnaire for these situations. For this reason, the questionnaire for intervention has not yet been finalized. The Ministry of Social Affairs and Employment indicates in the letter that it intends to continue discussions with representatives of the intermediary industry to further discuss the possibility of a web module for intermediary services. Nevertheless, the organizations involved AWVN, PZO, Bovib, NBBU and I-ZO have let it be known that there is no point in discussing this or other variants of the web module further.
Supervision and enforcement
The Tax Administration supervises the qualification of the employment relationship for payroll taxes. This supervision, as previously indicated in previous progress letters, is a complex matter. Effective enforcement first requires amending laws and regulations. More specifically, this means reducing the differences between employees and the self-employed (for labor law, social security and taxation) and providing more clarity on the qualification of the employment relationship.
Furthermore, it becomes clear - in line with the Grinwis motion from just before the summer recess - that the moratorium will not expire on October 1, 2021, but will run at least until October 1, 2021, and that enforcement will not be initiated pending further decision-making. The Tax Office does still enforce against malicious principals.
Progress on mandatory disability insurance for self-employed workers
The Cabinet has previously indicated that it embraces the Labor Foundation's proposal, provided that it can be designed in a feasible and affordable manner. The Tax and Customs Administration and the UWV previously criticized the plans in view of their complexity and (un)feasibility. Together with social partners, work is currently continuing on the elaboration and design of such insurance. Given the caretaker status of the Cabinet and the controversial declaration of this subject by the Lower House, further decision-making will be left to the next Cabinet.
In conclusion
The government's commitment in recent years has been clear; to give genuine self-employed people as much space as possible to do business while at the same time offering protection to vulnerable self-employed people. As became clear earlier, the proposals of a legal minimum rate for the self-employed and a self-employed declaration have not been realized.
On the other hand, the cabinet did take steps to create a more level fiscal playing field between employees and the self-employed through the initiated phasing out of the self-employed deduction. This means that the self-employment deduction will go down in steps to €3240 by 2036.
Access to training and development opportunities should also contribute to a more level playing field. It was announced on Budget Day that the Subsidy Stimulus Labor Market Position (STAP) will also be available to self-employed people. Working and non-working people can apply for a maximum of €1000 per person for education, courses and training.