In an ever-changing and dynamic legal landscape, it is critical that both self-employed individuals and clients have a clear understanding of what false self-employment entails and what consequences this can have. There is false self-employment when a worker works for a client as a self-employed person, while in the actual situation there is an employment contract. The client and contractor are jointly responsible for shaping the employment relationship correctly.

Here are the key points to consider if you want to position yourself as a self-employed person, or if you are a client working with self-employed people.

1. Legal definition of false self-employment 

Sham self-employment occurs when a self-employed person is ostensibly self-employed, but when the facts and circumstances point to an employment contract. Whether an agreement should be regarded as an employment agreement depends on all relevant facts and circumstances taken together. These include (1) the manner in which the work and working hours are determined, (2) the embedding of the work and the worker in the organization, and (3) to what extent the worker runs entrepreneurial risk. In practice, there are other criteria and indications that weigh in determining the employment relationship. Should an assignment contract with a freelancer nevertheless be qualified as an employment contract, this will have tax and legal consequences for both the freelancer and the client.

The main testing framework for this comes from existing case law and, in particular, the Deliveroo judgment. The Supreme Court has formulated several points of view that are relevant when assessing the employment relationship. It is important for self-employed persons and clients to be aware of these criteria and indications. On Friday, November 1, the Tax Office published a document entitled 'Explanation of assessment of working relationships'. This document further explains which legal principles and case law are important when assessing a working relationship.

To enshrine these viewpoints in law, political Hague is working on the draft bill Verduidelijking Beoordeling Arbeidsrelaties en Rechtsvermoeden (VBAR).. The law aims to create a clearer distinction between employees and the self-employed and give vulnerable workers at the base of the labor market (under €33 per hour) a better legal position. Consideration of this bill in the House of Representatives and the Senate has yet to take place. You can read more about it here.

2. Risks to the worker in false self-employment 

For the self-employed person themselves, the risks can be great if there is false self-employment. Consider:

  • Recoveries of tax benefits: when the tax authorities correct the employment relationship, tax benefits such as the self-employment deduction and the SME profit exemption can be recovered;
  • Fines and surcharges: the client may also face possible fines and surcharges of payroll taxes, as the self-employed person is subsequently considered an employee.Fines cannot be recovered from the zzp'er, after-tax payroll taxes can. However, in the Parliamentary letter of September 6, the government has announced that it will be lenient in the distribution of fines. For that reason, organizations that demonstrably take steps against false self-employment will not be fined in 2025.

3. Working on self-employment

To avoid false self-employment, it is essential to meet various criteria and elements associated with self-employment. These criteria include:

  • Entrepreneurial risk: make sure you bear the financial risk for your business and the work you do. Commercial risk is part of entrepreneurship;
  • As a self-employed person, make sure you make business investments of some magnitude. Consider investments in business equipment such as a laptop or investments in courses and training;
  • Make sure that you actually behave as an independent entrepreneur in economic and social life. Consider the number of clients you have and an active role in acquiring new clients;
  • It is important to actually implement contractual agreements in practice. Practice is leading, not agreements on paper. In legal jargon in legal jargon.

By meeting these criteria, self-employment can be demonstrated and prevent the Inland Revenue from qualifying the employment relationship as an employment contract.

4. All facts and circumstances count 

It is important to understand that the assessment of self-employment is a weighing of all the facts and circumstances. There is no single decisive criterion; the employment relationship is looked at holistically, or in other words, the total context of the employment relationship is considered. This means that model agreements are useful, but only when they are actually observed in practice. As indicated above, the Inland Revenue and judges look beyond the paper reality: the facts and circumstances in the workplace are ultimately decisive in assessing the employment relationship.

Conclusion

Bogus self-employment is a complex and important issue. For both self-employed workers and clients, it is essential to be aware of the legal definition, the risks, and the steps that can be taken to ensure proper qualification of the employment relationship. Carefully considering all relevant facts and circumstances and encouraging entrepreneurial criteria are crucial to actually working as an independent contractor.

HeadFirst Group finds it important to inform clients and freelancers about the latest political-social developments. Watch our webinar back about the lifting of the enforcement moratorium and how to prevent false self-employment.

HeadFirst Group's Public Affairs team closely follows political and social developments. Our experts are ready for you - leave your details and we will contact you.

Questions about this? Please contact us.

Sem Overduin
Public Policy & Affairs Manager
Sem.Overduin@headfirst.nl

Oifik Youssefi
Public Affairs Officer
Oifik.Youssefi@headfirst.nl

Maaike van Driel
Head of Legal
Maaike.vanDriel@headfirst.group

Thomas ten Veldhuijs
Senior Legal Counsel
Thomas.tenVeldhuijs@headfirst.nl