Parliamentary letter outlining labor market explained

In the vlog below, Lonneke Nouwen and Annemarie van Woudenberg explain the cabinet's plans for dealing with the labor market. These plans were published last week in the "outline letter" from the Minister of Social Affairs and Employment to the Lower House. The most important points are briefly summarized again below.

What are the government's goals for the labor market?

The cabinet wants to create a future-proof labor market. To achieve this, the cabinet wants security for workers and to reduce the possibility of using flexible labor. In addition, it wants "agile enterprises. This can be achieved, for example, by part-time unemployment (and thus 'partial dismissal'), promoting work-to-work counseling for employees at the end of their employment contract and reintegrating sick employees (even faster) with another employer during the second year of illness. There must also be a more level playing field between employees and the self-employed. This will be achieved, among other things, by combating unfair competition and false self-employment.

What will be the key measures?

Zero hours and min-max contracts

These on-call contracts will disappear in their current form. They will be replaced by so-called "basic contracts" with more job and schedule security. It remains to be seen what this basic contract will look like. An exception may be made for pupils and students.

Temporary contracts

These contracts are further regulated to improve the position of temporary workers. Working conditions become equivalent to those of workers employed directly by the hirer. Also, the "uncertain" periods of temporary employment (Phase A and B) will be limited to a total maximum of three years (52 weeks Phase A and two years Phase B). This is now a maximum of four (52 weeks Phase A and three years Phase B) years for a temporary employment contract entered into after January 3, 2022 and five and a half years (78 weeks Phase A and four years Phase B) for a temporary employment contract entered into before that date. It also eliminates the interruption period, making all previous contracts with an employer count toward the contract duration. After Phase B, the temporary worker enters Phase C. He then has an indefinite contract and the contract cannot simply be terminated.

Chain Arrangement

At present, the chain rule means that an employer may conclude a maximum of three fixed-term employment contracts with an employee within a maximum period of 36 months. The chain starts again after an interval - between two temporary employment contracts - of at least six months. This so-called "breakthrough rule" will be dropped as far as the Cabinet is concerned. This ensures that all temporary employment contracts will count towards the chain rule. An employee will therefore be given an employment contract for an indefinite period of time much more quickly, or the parties will definitely separate after 36 months. However, an "administrative expiration period" will be worked out by the cabinet. What exactly that should entail is still unclear. As soon as more is known about this, we will of course inform you.

Zzp'ers

The self-employment issue has been around for quite some time. When is someone an employee and when a self-employed person? And how can false self-employment be countered? Currently, the implementation of the Wet DBA, which aims to combat the latter, is constantly being postponed. It is only enforced in case of obvious abuse. There will now be an approach via three lines to make working with and as a self-employed person(s) more future-proof:

1. Commit to a more level playing field. Currently, in too many cases it still pays for the employed to become self-employed at short notice. Mandatory disability insurance and the possibility of pension accrual for the self-employed should counteract this more. The government also intends to limit the self-employment deduction.
2. Create more clarity about when self-employment is involved. To this end, a so-called "legal presumption" for a relationship of authority is created. This relationship of authority often determines whether an employee or a self-employed person is involved. With the legal presumption, a client will have to prove that there is no relationship of authority. By placing this responsibility on the client, he will have to check carefully when entering into a contract whether or not there is a relationship of authority.
3. Improving supervision and enforcement on false self-employment. By January 1, 2025, the "enforcement moratorium" (the suspension of implementation) of the DBA Act will be abolished. After that, the tax authorities, among others, will further tighten the supervision on false self-employment.

The cabinet's above plans on self-employment promise big changes. However, the DBA Act already went into effect on May 1, 2016, so it will now actually be enforced no later than Jan. 1, 2025, according to the cabinet.

When do these measures go into effect?

The measures will be implemented in several stages. The first measures, including the disappearance of on-call and min-max contracts, will already go to the Lower House in early 2023. The new working method for zzp'ers will come last.

Do you have questions about how the cabinet's measures will affect you and as of when? If so, please be sure to contact us. We will be happy to help you!