Legislation & politics

On Friday, Dec. 16, Minister Van Gennip (SZW) and State Secretary Van Rij (Taxation and Customs Administration) presented the "Progress Letter on Working with and as Self-Employed(s)" to the Lower House. Numerous topics are discussed in the letter, such as a legal presumption of employment below a certain hourly rate, the enforcement moratorium of the DBA law and the clarification of the authority criterion. Much remains to be worked out in the coming period, but in response to the proposed plans for the zzp dossier, I am happy to respond.

Recognition of self-employment
In the first pages of the letter, the importance of self-employment for the Dutch labor market is highlighted. I am pleased that the Cabinet recognizes the position and added value of the self-employed. With their knowledge and expertise, self-employed people make an important contribution to solving problems at numerous organizations. It is impossible to imagine our labor market without the self-employed IT professional or project manager. Time and again, research shows that the majority of the self-employed population is very satisfied with their working conditions, salary and sense of autonomy. This is a development we should cherish.

The search for the right balance of elements
At the same time, I am critical of some plans. For example, the cabinet plans to clarify the authority criterion by more explicitly embedding the criterion of 'embedding in the organization' when assessing the employment relationship. In an earlier column, I hinted that the clarification of the authority criterion remains a hot topic of discussion. I remain of the opinion that it becomes very complex to clearly define embeddedness in the organization. When is a worker "embedded in the organization"? And what tasks belong to "the regular work of an organization"? This discussion has been had before and was not settled at the time. Many freelancers work in IT, HR or project management and are more or less embedded in the organization. Will this soon no longer be possible? It is undoubtedly going to cause unrest among clients, intermediaries and zzp'ers. Given the shortage of - and at the same time the high demand for - specialist personnel, this unrest seems highly undesirable to me. What we need right now are rules that encourage and facilitate mobility in the labor market and self-employment. I therefore remain strongly in favor of a pluralistic labor market with different forms of contracts. A labor market where people are given the space to organize their work themselves. I am convinced that this will have a positive effect on the productivity and job happiness of workers and will result in a more innovative and better functioning labor market.

Another element that will receive more attention in determining the employment relationship is the self-employment of the worker. I read in the parliamentary letter that embedding in the organization does not necessarily mean an employment contract. That the government is seeking balance in determining the employment relationship is positive to me. In my opinion, we need to look not only at the task being performed, but also at the individual. Clear entrepreneurial criteria, such as the amount of the rate and specialized knowledge are pre-eminent criteria to include in the assessment of the employment relationship. By assessing the correct facts and circumstances, the distinction between employee and self-employed will automatically become clearer. Clear entrepreneurial criteria will also help the Inland Revenue to enforce effectively.

Opportunities for the intermediary industry
In the coming months the plans will be further elaborated in consultation with stakeholders, experts and social partners. I am pleased with the outstretched hand of the cabinet to take this up together with market parties. A strong coalition of industry associations (ABU, NBBU, I-ZO, VvDN, RIM and Bovib) seems to me to be a pleasant and expert discussion partner for the Cabinet, the Tax Administration and policy makers. By bringing daily practice to The Hague, clear and verifiable entrepreneurial criteria can be drawn up. The members of these industry associations are pre-eminently the specialists when it comes to organizing external hiring and contracting of zzp'ers. Therefore, use their knowledge and expertise!

There is also a great opportunity for intermediaries. The changes that lie ahead offer the opportunity to further professionalize the relationship with contractors, suppliers and clients. By advising and supporting both the supply and demand sides of the labor market in complying with changing laws and regulations. By helping them draft or further develop their hiring policies. At HeadFirst Group, we are aware of the challenges ahead. At the same time, this makes us indispensable in a dynamic, multiform and rapidly changing labor market. New rules force us to adapt. The trick is to successfully bring our relations along with us.

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:

1. 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.
2. 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.
3. 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.

Wednesday, Dec. 7, during the Committee on Disability debate, mandatory disability insurance (AOV) was discussed. Plans that only a third of the highly educated self-employed support. However, almost half are in favor if self-insurance is allowed as an alternative. HeadFirst Group supports the principle of an AOV for all self-employed, but choice is a crucial success factor.

AOV with proper choices important
By Jan. 1, 2025, there must be a law for self-employed persons to be compulsorily insured against disability. A simple AOV can be implemented by 2027, more customization means postponement to 2029. Minister Karien van Gennip of Social Affairs and Employment is investigating customization in the form of an opt-out scheme.

Mandatory AOV is significant to protect vulnerable self-employed workers and provide security. At the same time, we must keep an eye on the diversity of the self-employed population with different assignments, starting motives and hourly rates. The option for self-insurance, at least equal in content to the public AOV, can count on support because it fits well with the different wishes and needs of this group of workers.y

Half of self-employed people have nothing arranged yet
Currently, just under half of self-employed people have covered the risks of occupational disability themselves - for example, through a private party or a mutual fund. The most important reasons for highly educated self-employed workers to take out insurance is that they are unwilling (58 percent) or unable (17 percent) to bear the financial risk themselves. Another 11 percent cannot fall back on their partner's income.

Of the self-employed who have not taken out disability insurance, 31 percent say they can bear the financial risk. Furthermore, over a quarter feel the costs do not outweigh the benefits and 15 percent consider the risk of disability low.

For self-employed people who have not yet arranged anything if they become disabled, HeadFirst Group has a low-threshold provision: Select iCommunity Crowdsurance (SiCC). This is a provision based on a donation circle. This also matches the desire of self-employed workers to bridge the 52-week own risk period with a bread fund - desired by 12 percent of research participants - or to shorten the waiting period (35 percent).

Documents:
InfographicOpinionMonitorAOV2022.pdf

Note to editors:
The results of the 'AOV Opinion Monitor 2022' have been compiled in an infographic, which is attached. For more information, contact Natasja Spooren, Teamlead Communications at HeadFirst Group, reachable on 06 - 151 924 85 or natasja.spooren-wassenaar@headfirst.nl.

A third of highly educated self-employed support plans for mandatory disability insurance (AOV). However, almost half are in favor if self-insurance is allowed as an alternative. So says research by HR-tech service provider HeadFirst Group among more than 1,400 participants. CEO Marion van Happen shares the opinion about this opt-out: "We support the principle of an AOV for all self-employed people, but choices are a crucial success factor in this."

Opt-out scheme
By January 1, 2025, there should be a law to make it mandatory for self-employed workers to have insurance against disability. With the aim of preventing large income risks for individuals and countering unfair competition on working conditions. The rules and conditions of the intended law were recently discussed again during the Labor Market Policy Committee debate. In it it was announced that a simple AOV can be implemented by 2027, more customization means postponement to 2029. Minister Karien van Gennip of Social Affairs and Employment is investigating customization in the form of an opt-out arrangement.

Van Happen - along with the SER - stresses the importance of introducing an AOV with the right choices. "Mandatory disability insurance is important to protect vulnerable self-employed people and offer security. At the same time, we must keep in mind the diversity of the self-employed population with different assignments, starting motives and hourly rates. The option for self-pay insurance, which is at least equal in content to the public AOV, can count on support because it fits well with the different wishes and needs of this group of workers," Van Happen said.

Half of self-employed have nothing arranged
Last year HeadFirst Group also surveyed the opinion of self-employed people in the field of AOV. The results are virtually unchanged. Currently just under half of the self-employed have covered the risks of disability themselves - for example through a private party or a mutual fund. The most important reasons for highly educated self-employed workers to take out insurance is that they are unwilling (58 percent) or unable (17 percent) to bear the financial risk themselves. Another 11 percent cannot fall back on their partner's income. Of the self-employed who have not taken out disability insurance, 31 percent say they can bear the financial risk. Furthermore, over a quarter feel the costs do not outweigh the benefits and 15 percent consider the risk of disability low.

For self-employed people who have not yet made any arrangements should they become disabled, HeadFirst Group offers a low-threshold provision: Select iCommunity Crowdsurance (SiCC). This is an endowment-based provision. It is a net benefit for up to two years. In line with the need for an affordable, flexible solution that does not pay out until retirement age, but for a framed period. This provision also matches the desire of self-employed workers to bridge the 52-week self-risk period with a bread fund - desired by 12 percent of research participants - or to shorten the waiting period (35 percent).

Check out the survey results in this infographic.

The Labor Market Policy Committee debate took place last Thursday. The Parliamentary Committee on Social Affairs and Employment spoke with Minister Van Gennip (SZW) about the announced plans to reform the labor market. In the debate, she indicated that she was committed to clarifying the authority criterion to determine whether an employee or self-employed person is involved. That the Cabinet recognizes this and is working toward replacing it is crucial.

Embedding in the organization
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 about the interpretation of when authority exists. When is a worker "embedded in the organization"? And what tasks are part of "the regular work of an organization"?

In practice, we 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. We need more customization.

What next?
Currently, the minister is working with the social partners to further develop the proposals. She aims to have the next letters ready before Christmas so that they can be shared with the House of Representatives in January. These letters will clarify how the minister intends to further clarify the authority criterion and form the basis for the debate in February 2023, after which the bills can be shared with the market through an Internet consultation in the summer of 2023.
All in all, it is clear that all parties feel the urgency to tackle false self-employment quickly and keep up the pace. As the largest HR-tech service provider, we will of course remain in dialogue with our stakeholders in The Hague and will act together with our partners.

Note to editors:
For more information: Natasja Spooren, PR & Content Specialist at HeadFirst Group, reachable at 06 - 151 924 85 or natasja.spooren-wassenaar@headfirst.nl.

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 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.

Minister of Social Affairs and Employment Karien van Gennip and State Secretary of Finance Marnix van Rij responded last week to two investigations about the lack of enforcement on false self-employment by the Tax Administration. They emphasized that they want to tackle false self-employment "in conjunction". First, the cabinet wants clear rules around the hiring of freelancers, a more level playing field between employees and the self-employed, and research into the consequences of enforcement for controlling agencies. Until there is more clarity, the enforcement moratorium on the DBA law will remain in place.

HeadFirst Group embraces the message of branch organization Bovib (branch organization for intermediaries and brokers), which together with ABU, I-ZO Netherlands, NBBU, RIM and VvDN sent a response to the parliamentary letter on enforcement of the law DBA. We support the ambition to prevent false self-employment and are pleased that the government recognizes the complexity of monitoring distinctions between employment relationships.

Take example of Belgian Labor Relations Act

One of the suggestions described: consider the Belgian Labor Relations Act as a serious option. In the structure of this law, the labor relationship is assessed on criteria specific to the situation where a worker is hired by a client. In this way, more clarity is created, without amending labor law and without affecting workers' rights. Such a structure fits with the fact that the nature of the employment relationship does not depend on one criterion (such as authority relationship), but several in conjunction (for example, also the nature of the assignment, sector or specialty of the worker). Moreover, self-employed workers who, for example, sell products or provide services to individuals (together about half of all self-employed workers) are not affected by this solution.

A setup like the Belgian Labor Relations Act also removes the current objections to the web module. This is because this tool now too often does not provide a definitive answer and does not take into account contextual circumstances surrounding entrepreneurship. Furthermore, the web module is currently not suitable for situations where self-employed persons work from a PLC or through an intermediary.

Meanwhile, the labor market and zzp-dossier gets all the attention in The Hague, with yesterday a debate and today a letter from Minister Van Gennip. HeadFirst Group follows it closely and likes to think along about the assessment criteria, further implementation and enforcement on false self-employment. A well functioning labor market is in all our interests.

Hans Biesheuvel, founder of ONL voor Ondernemers, has been an entrepreneur at home and abroad for 35 years. With all the knowledge and experience he has gained in these years, he is committed to one goal: to make the voice of many entrepreneurs heard by politicians.

With ONL, Biesheuvel is closing the gap between the business community (the self-employed and SME organizations) and The Hague. By bundling information and translating it in such a way that it ends up on the political agenda. "Lobbying, raising problems and creating support are crucial here. But certainly also offering a solving and helping attitude in realizing this," Biesheuvel explains.

ONL has the influence to bring about real change. For example, after the corona outbreak there was immediately a plan with recovery measures, which was almost completely followed by politics. But also substantive input on the future of the Dutch labor market was included in the Borstlap Committee report. This input was created in collaboration with HeadFirst Group, similar to reports such as 'De zzp'er bestaat wél' and 'Een kijkje over de grens', and plays an important role in influencing the political agenda.

"It's better to talk with each other than about each other. Our office in The Hague is the place for that. Working together to make change possible."

In the past two years, politics has been lived by the subject of corona, while important dossiers await. The energy transition, the housing market and certainly also the labor market require attention. Biesheuvel: "It is time to take decisions. Even if we continue to be inundated by a tsunami of problems, it is important that we look ahead. And we are providing the right handholds for that."

This interview appears in our Annual Report. Curious about other interviews or our results and strategy? Then read the entire report.

Last Thursday, Parliamentary questions about enforcement of the DBA law were answered by Minister Van Gennip and on Thursday, June 30, the SZW Committee will debate the zzp dossier. Ahead of this, ZiPconomy published the report "Employee, unless... 8 variants for replacing the DBA law.

A clear overview of all the different proposals made in recent years to replace the DBA law. More importantly, the pros and cons 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 into account labor market situation

Two elaborated variants, the proposal of the Borstlap Commission 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.

I completely agree that there should be clear rules and frameworks for when someone can be hired as a self-employed person. However, 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.

Belgian model good alternative

The report also highlights the Belgian model with the Labor Relations Act. In Belgium, the problem of false self-employment is effectively combated by (1) having a clear set of criteria as to whether someone can 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. This combination of factors works well in Belgium, so it is interesting to see if we can adopt the positive aspects and improve the less good ones in the Netherlands.

And now?

For now, it is not clear what the next step will be from Minister Van Gennip. Before the summer, an outline letter will go to the House of Representatives on the elaboration of the labor market package. Finally, there will be a response to the report of the Court of Audit before the debate on June 30. We are following developments closely and remain in close contact with MPs and policy staff.

The report "Employee unless... 8 variants for the replacements of the DBA law is available for download on the ZiPconomy website.