Legislation & politics

Wednesday, December 15, 2021, the long-awaited coalition agreement "Looking out for each other, looking forward to the future" was presented. For the labor market, the new administration has an important goal: reform to reduce burdens, improve social security and combat poverty. 'So that working pays, being an employer and entrepreneur remains attractive, our well-being increases and staff shortages in vital sectors can be met.' Han Kolff, CEO HeadFirst Group, responds to the proposed plans.

Rutte IV wants to invest €500 million annually to implement "a number of major reforms," guided by the principles of the Borstlap Commission and the MLT advice of the SER. Solid reports and largely good plans, but now the hard part begins: implementation. This also applies to the premise 'genuine self-employed people are supported and entrepreneurship is stimulated', which has not been further elaborated. I underscore the point of view wholeheartedly, but it depends on making the right choices. Translating words into action requires manpower, knowledge and a clear vision.

The current tightness in the labor market only compounds this challenge. Hastily implementing generic and ill-considered plans can have fatal consequences. We saw this with the introduction of the DBA law, when many independent professionals (zp'ers) experienced loss of income due to reluctant clients. Indeed, many self-employed people are still experiencing inconvenience: the lack of clarity has meant that more than half have found it more difficult to find a suitable assignment. This is on top of the self-employed, nearly 40 percent, whose assignments have been terminated prematurely by clients in recent years due to concerns and lack of clarity around legislation. We absolutely cannot use any further increase. We desperately need every professional group, in whatever form of contract, in the coming years.

Further development of web module
Despite criticism of the web module from industry associations and zzp-interest groups, the focus for the replacement of the DBA law is mainly on the further development of this questionnaire. To create both political and social support, a crucial step is for the Lower House to hold a substantive debate with Karien van Gennip and Marnix van Rij - ministers of Social Affairs and Finance and key players in this discussion - on the pilot results of the web module. The web module can provide certainty in advance, but it is essential that relevant officials at the department restart the conversation with field parties to critically review the underlying system of questions and make fundamental adjustments.

The outcome must not lead to reduced hiring of the self-employed, who are not in need of help and do not need protection against false self-employment. I emphasize this emphatically, because clients and intermediaries do not benefit from unrest and uncertainty either. For situations of intermediation, the web module is not ready, nor has there been a pilot phase. The intermediary industry is happy to help with the further development of a workable web module, so that we can prevent unrest and demand drop-out from self-employed workers.

Enforcement on employment relationships
To "combat false self-employment, there will be better public enforcement in the case of suspected employment". As we discussed in a roundtable discussion with FNV Zelfstandigen, ONL voor Ondernemers and TNO, enforcement on labor relations can have an important function for the balance on the labor market. Important to protect vulnerable and forced self-employed workers and offer security, at the same time we must keep an eye on the diversity of the self-employed population and give conscious self-employed entrepreneurs in the higher segment the freedom to do business. Start enforcement step by step in the sectors, where we know there are many vulnerable self-employed workers working at lower hourly rates. The SER opinion provides guidance for this and keeps the labor market above €35 open and workable.

Stay in conversation with field parties
I advise politicians to stay in conversation with industry associations, intermediaries and self-employed advocates. These are the specialists when it comes to connecting supply and demand in the fragmented and very tight labor market. As one of the parties guiding people from work to work and contributing to the sustainable employability of employed people, we are happy to do our part. In the coming years, we are happy to work and - more importantly - implement the plans to make serious work of the labor market of tomorrow.

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.

The failure to tailor laws and regulations hinders the labor market. For example, the DBA law is still causing anti-zzp policies among various clients. This is problematic for the self-employed, but in view of the extreme scarcity in the labor market certainly also for clients. According to Han Kolff, CEO of HeadFirst Group, this requires decisiveness from politicians in The Hague and from clients.

Market maximally oversupplied
It is becoming increasingly complicated for organizations to find talent. Record after record is being broken of the number of open vacancies, and since the CBS measured the tension in the labor market, the number of vacancies has never before exceeded the number of unemployed. The limits of the flexible labor market have also almost been reached. HeadFirst Group and Intelligence Group showed in the recently released Talent Monitor that the (active) supply of independent professionals (zp'ers) is drying up and the benches at secondment agencies are emptying.

'Anti-zzp policy' still in play
In a time of extreme scarcity, all available talent is needed to keep the economy running. Despite this, various clients still too often exclude an important target group with valuable knowledge: independent professionals. This is the result of the DBA law and the "assessment of the relationship of authority" directive, which still causes nerves.

Since it is not always clear whether there is a relationship of authority between client and contractor - and the Tax Office only assesses afterwards - there is a fear among clients of possible retrospective levies. The Cabinet's earlier decision to suspend enforcement on this as of October 1, 2021, until more is clear about replacement legislation, is a wise choice. It was expected that this would create calm among principals. Unfortunately, little has changed among most clients when it comes to looking at self-employed workers in hiring applications or tenders, as we saw recently at the Municipality of The Hague.

The self-employed are hindered by this, although this is currently disguised by the fact that there is sufficient work for clients who are open to self-employed workers. It is most problematic for clients, who in the war for talent need every target group on the labor market, and certainly the knowledge-intensive group of hundreds of thousands of self-employed in the Netherlands.

Appeal to clients and politicians in The Hague
That principals are looking critically at hiring zp'ers for roles where perhaps someone in permanent employment would make more sense is good. But let go of the widespread fear of hiring self-employed workers. Within the frameworks of the DBA Act, more is possible than is currently happening at various clients. With a clear assignment description with defined results, good guidance for hiring managers on how to avoid a relationship of authority and a critical look at extremely long assignment periods, the expertise that self-employed people have can be used.

In addition, a call to a next cabinet, in line with earlier noises from professors, industry associations and self-employed organizations: get to work quickly on serious labor market reforms. Hold existing rules up to the light and engage in discussions with a broad representation of stakeholders. The pilot of the web module has shown that in certain sectors - such as transport, construction and hospitality - the risk of abuse with zzp constructions is highest. Vulnerable self-employed workers in these sectors deserve protection and benefit from effective enforcement. The €35 guideline in the SER opinion provides guidance for this. Only that removes the tension of the term "authority relationship" at the upper end of the market. That need has only increased with the current scarce labor market.

The European Commission wants the Netherlands to further cut tax credits for self-employed workers. It would be one of the two conditions to claim coronasteun from Brussels, mentioned the FD. This once again makes zzp'ers the subject of the political-social discussion about the labor market.

Politicians in The Hague see creating a more level playing field, including by phasing out the self-employed deduction, as one of the solutions to the proliferation of self-employed workers. We embrace the creation of a more level playing field. After all, every individual in the Netherlands - regardless of the form of work and employment relationship - is entitled to protection and security.

However, a helping hand from politicians is desperately needed for the self-employed with lower hourly rates and small financial buffers. This group benefits from protection, for example against the consequences of disability and unemployment. Nevertheless, due to the fixed amount of the self-employment deduction, self-employed people with lower incomes are hit harder.

Only 7 percent self-employed call themselves forced self-employed
A growing group of employed people - in their search for autonomy and challenge - are making the move to self-employment. Only just under 7 percent of the self-employed population call themselves forced self-employed. It is high time for a solution that supports needy self-employed people, but leaves the larger group of conscious self-employed people free to do business.

However, this must go hand in hand with collectivity, social security and modern solidarity. A basic social system is needed for all workers, regardless of their contract or legal form, with securities that move with the changes in their working lives. A substantial change from the current system, but much needed to future-proof the labor market.

To take the debate on the labor market to a higher level, facts and figures of self-employed people are needed. On Monday, November 8, ZiPconomy, ONL and HeadFirst Group will present a report with the aim: to map the diversity and heterogeneity of this group and contribute to a rational and factual debate.

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.

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.

Highly educated zpp'ers give the trust relationship with national politics, on a scale of one to ten, a 4.6. This is evident from research by HR service provider HeadFirst Group, in which over two hundred independent professionals (zp'ers) participated. Underlying the low score are reasons such as doubts about expertise and the feeling of not being appreciated and poorly represented. Han Kolff, CEO at HeadFirst Group, takes the responsibility to contribute to the restoration of this trust: "Give self-employed people an independent place in the SER and start an accessible conversation with all types of self-employed people in the Netherlands. We like to play the connecting role to bring both worlds closer together."

Political trust historically low
Earlier research by the Social and Cultural Planning Office showed that confidence in politics fell sharply in the first six months of 2021. The stalled formation, the handling of the corona policy and the political aftermath of the allowance affair were at the root of this. These are also reasons often mentioned among self-employed people.

What plays a much bigger role for self-employed people, however, is the feeling that there is insufficient representation in the decision-making process. They experience that the traditional polder parties, such as trade unions and employers' organizations, are mainly listened to. In addition, self-employed people are annoyed by the fact that all types of self-employed people are lumped together and that politicians in The Hague have the wrong image of self-employed people: 'calculating self-employed people with tax advantages' instead of 'hard-working, passionate self-employed people who consciously choose entrepreneurship'. Finally, self-employed people doubt politicians' dossier knowledge and their ability to solve labor market issues. The lack of clarity and impracticability of laws and regulations for the self-employed, the DBA law in particular, was often mentioned as an example.

Building trust
Although the relationship of trust is under pressure, Kolff sees prospects for restoring it. An important point, which is in line with the "Outline Document" of the VVD and D66, is the representation and independent position of zzp'ers in the Social and Economic Council. "This gives zp'ers a central place in the decision-making process, so that interests can be better heard," Kolff explained.

In addition, he believes it is desirable to bring self-employed people in direct contact with MPs to share and discuss their concerns, entrepreneurial choices and practical bottlenecks. This knowledge exchange will have a positive effect on the information position and knowledge level of politicians. "Our core task as a labor market platform and service provider is to connect. We also like to fulfill this task between self-employed people and politicians, so that we can have a constructive debate together about the future of the Dutch labor market and the role of self-employed people therein," Kolff said.

About HeadFirst Group
HeadFirst Group is a leading, international HR service provider and specialist in the professional organization of permanent and flexible labor. The organization offers a diversity of HR solutions: Managed Service Providing, Recruitment Process Outsourcing, intermediary services (matchmaking, contracting) and HR consultancy. An average of fifteen thousand professionals work daily for over four hundred clients in Europe, with which HeadFirst Group realizes an annual turnover of over 1.5 billion euros. The main brands of HeadFirst Group are the intermediaries HeadFirst, Between and Myler, MSP service provider Staffing Management Services and RPO and recruitment specialist Sterksen.

Note to editors
Read the entire report 'The political trust of the independent professional by the yardstick'here.

Do you have any questions or comments in response to this press release? Feel free to contact Bart van der Geest, manager of marketing & communications at HeadFirst Group, reachable at 023 - 568 56 30 or bart.vandergeest@headfirst.nl.

Last Thursday, the House of Representatives met for the last time just before the summer recess to debate outgoing State Secretary Vijlbrief (Finance). Around midnight, MP Pieter Grinwis (ChristenUnie) tabled a motion asking the cabinet to provide more clarity on the enforcement moratorium - the period of limited enforcement - and the DBA law in the near future. With a large majority in favor of the motion, the House signaled its support for the content of the motion and its desire to first have a "reasonable and enforceable alternative to the DBA Act" before starting enforcement on false self-employment. Vijlbrief wanted to clarify something on this: "The enforcement moratorium does not end in October. It runs at least until October and then we will see what we will do." This echoes that the limited enforcement will be extended until there is clarity on an alternative to the DBA law, a reassurance for clients, self-employed workers and intermediaries.

Unrest in media

In recent weeks, several reports appeared in the press about ambiguity surrounding the DBA law. ZZP Nederland and PZO sent a fire letter to Vijlbrief on June 17 to make a decision on the enforcement moratorium in the short term. Research by HeadFirst Group also showed that, because of the approaching end of the enforcement moratorium, clients started to act risk-averse and looked more critically at the hiring of independent professionals, thereby terminating assignments of self-employed professionals prematurely and making it increasingly difficult for self-employed professionals to find assignments. This unrest and uncertainty - especially now that the Dutch economy is back in the starting blocks - is far from desirable, for self-employed professionals, clients and intermediaries alike.

Good move by Vijlbrief

In any case, the enforcement moratorium of the DBA law will not expire on October 1, 2021. The government intends to wait for the results of the web module pilot before making a decision on the enforcement moratorium and the introduction of new laws and regulations. This is in line with the earlier progress letter "Working as a self-employed person," which indicated that "the phasing out of the enforcement moratorium will be linked to the introduction of new legislation, which provides more clarity about the nature of the employment relationship. The market will also be given sufficient time to get used to new measures.'

We are still waiting for a clear and enforceable alternative to the DBA law, but for now we are pleased that the Secretary of State has received the signals and has taken this decision. Han Kolff, CEO at HeadFirst Group, is satisfied and relieved: "From signals we received from clients and freelancers it became clear that people were really ready for clarity and decision making from The Hague. Our research emphasized this with facts and figures. It is a wise choice that the enforcement moratorium remains in place until more is clear about the results of the web module pilot and replacement legislation for the DBA law. This gives the market more time to get used to new measures, gives zzp'ers more certainty to do business and gives politicians time to consider how best to proceed with enforcement. Great that this peace is being created and that we can start building new laws and regulations together."

Over 60 percent of highly educated self-employed people support a basic social system for all workers in the labor market. This is evident from research by HR service provider HeadFirst Group, in which over 1,700 self-employed professionals (zp'ers) recently participated. A wide support compared to the support for a compulsory disability insurance (AOV) for self-employed, where just 70 percent feels nothing for it. It makes Han Kolff, CEO at HeadFirst Group, feel positive. "We embrace the idea of creating a more level social playing field. Every individual in the Netherlands - regardless of the form of work and employment relationship - is entitled to protection and security."

Last month, the SER issued the advice to create a social safety net for the self-employed for special and unforeseen circumstances. Self-employed people should contribute to this themselves. Kolff goes a step further and advocates a basic provision for all employed people, as proposed in the social agreement between ONL, VZN and AVV. "Don't make the zzp'er an exception, but offer a broad safety net. We are moving towards a labor market in which the work is central, not the contract or legal form. Therefore, it is important to create securities that move with the challenges and changes people encounter in their working lives."

Security at the level of individual
Kolff is fed into this by the opinions of self-employed people. Research by HeadFirst Group shows that especially in the field of disability a basic system scores high: 61 percent are in favor. Sickness and unemployment has fewer supporters, but is certainly not excluded with 41 and 24 percent. "Solidarity among self-employed people is high. Still, I was surprised by the number of self-employed people willing to contribute to a basic social system, for disability in particular. If in this way we can protect the needy self-employed and leave the rest free to do business, then we are really taking a step in the right direction. It is up to the new cabinet to pick up this gauntlet and get serious about this," Kolff stressed.

Support for compulsory AOV low
The SER also announced its adherence to the agreement in the Pension Agreement to make it compulsory for self-employed persons to have insurance against disability to prevent unfair competition and large income risks for individuals. In March last year, the Labor Foundation came up with a proposal for the implementation of compulsory AOV. This proposal drew criticism from self-employed individuals' organizations. The Tax and Customs Administration and the UWV also informed outgoing Minister Koolmees that they had doubts about the technical implementation. Yet it seems that the plan is not yet off the table. However, the government cannot count on the support of self-employed workers; only 30 percent are positive.

Half of self-employed workers have nothing arranged
Currently, half of the self-employed have covered the risks of occupational disability themselves - for example, through a private party or a mutual fund. The most important reason for self-employed workers to take out insurance is that they are unwilling (53 percent) or unable (21 percent) to bear the financial risk themselves. Another 16 percent cannot fall back on their partner's income. Of the self-employed who have not taken out disability insurance, 35 percent say they can bear the financial risk. Furthermore, one in five feels the costs do not outweigh the benefits and 11 percent consider the risk of disability low.

About HeadFirst Group
HeadFirst Group is a leading, international HR service provider and specialist in the professional organization of permanent and flexible labor. The organization offers a diversity of HR solutions: Managed Service Providing, Recruitment Process Outsourcing, intermediary services (matchmaking, contracting) and HR consultancy. An average of fifteen thousand professionals work daily for over four hundred clients in Europe, with which HeadFirst Group realizes an annual turnover of over 1.5 billion euros. The main brands of HeadFirst Group are the intermediaries HeadFirst, Between and Myler, MSP service provider Staffing Management Services and RPO and recruitment specialist Sterksen.

Note to editors
All outcomes of the study have been compiled into aninfographic.

Do you have any questions or comments in response to this press release? Feel free to contact Bart van der Geest, manager of marketing & communications at HeadFirst Group, reachable at 023 - 568 56 30 or bart.vandergeest@headfirst.nl.