On June 24, 2019, Mr. Koolmees published a letter to the House of Representatives on the progress of the measures surrounding the new zzp legislation. This letter shows that the plans, as previously reflected in a letter from Minister Koolmees on November 26, 2018, have nevertheless changed again. The plans for the so-called "low rate employment contract", "opt-out" and "employer's declaration" are more or less dropped or are shaped differently after all. The cabinet has now designed three new measures:
- A minimum rate for the lower end of the labor market;
- A self-employment statement for the upper end of the labor market, and
- An (updated) principal's statement.
Minimum rate
A minimum rate of €16.00 per hour will apply to self-employed workers. This will allow self-employed workers - according to the cabinet - to meet their minimum living requirements. With the introduction of this minimum rate, the government wants to prevent self-employed workers from being hired at too low a rate. The Cabinet recognizes that there are also some risks associated with the introduction of a minimum rate. For example, the Cabinet does not rule out that certain self-employed persons at the bottom of the market will receive fewer assignments. The Cabinet also does not exclude that the introduction of the minimum rate will have a normative effect, as a result of which self-employed persons who currently earn more than €16 will soon be paid the minimum rate. The cabinet will therefore investigate these possible labor market effects.
It is also expected that as a result of this minimum rate, the administrative burden on the client will increase. This is because it is the client's responsibility to ensure that the minimum rate is paid. So if it turns out afterwards that the contractor has worked more hours and, as a result, actually receives an amount of less than € 16.00 per hour in relation to the contract sum, the client will have to pay the contractor an extra fee to ensure that the minimum rate is still paid.
The self-employment statement
The measure for the upper end of the labor market involves a "self-employment declaration. If the conditions for the declaration of self-employment are met, the client cannot subsequently be confronted with payroll taxes and payment of social premiums. In addition, the freelancer can no longer claim, among other things, continued payment of wages during illness. The conditions for the declaration of self-employment are:
- The assignment contract must state that the parties do not intend to enter into an employment contract with each other.
- The self-employed person must earn a minimum of €75.00 per hour.
- The contract is agreed for a maximum of 1 year. Only after an interruption of 6 months can a new contract be concluded between the parties, to which a self-employment declaration applies.
- The parties must both sign the statement.
- The self-employed person must be registered with the Chamber of Commerce.
Principal's Statement
The last measure concerns the client declaration. A measure that is not mandatory. A web module can be used to determine whether an employment relationship exists. If there is no employment relationship, the web module issues a principal's declaration, which provides certainty that no payroll taxes or social security contributions need to be withheld or paid. This principal's declaration is only valid if it is filled out truthfully and also worked on accordingly. The client declaration is thus similar to the model agreements, which can be used under current legislation.
Enforcement
The Cabinet aims to put this legislation out for Internet consultation in the third quarter of 2019. The Cabinet further hopes that the legislation can enter into force in 2021. Until then, it will remain possible for the Tax Authority to enforce the DBA Act in cases of malicious intent, and the possibilities for enforcement will even be further tightened. From January 1, 2020, the Tax and Customs Administration will also be able to enforce when clients fail to follow instructions from the Tax and Customs Administration (or fail to do so adequately) within a reasonable period of time. The Tax and Customs Administration issues such instructions if, for example, the Tax and Customs Administration finds that the qualification of the employment relationship for payroll taxes is not in accordance with current legislation. Consider the situation where client and contractor have actually entered into an employment contract with each other.
In short, it will remain important in the coming period to remain critical with regard to the use of freelancers and to record this cooperation properly. Of course, our specialists are ready to answer your questions about this.
