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26 June 2019

Increased supervision of freelancers from autumn 2019 onwards

Employment law & payroll taxes

In the Parliamentary Letter on the supervision of labor relations (Kamerbrief toezicht arbeidsrelaties) of 24 June 2019, the government clarified the supervision and enforcement strategy regarding the Assessment of Employment Relationship (Deregulation) Act (Wet Deregulering Beoordeling Arbeidsrelaties, hereinafter: DBA Act). This letter followed after several company visits showed that many clients of freelancers still acted incorrectly to a lessor or greater extent.

Larger supervision capacity and increased enforcement by tax authorities

Until the government introduces new legislation regarding freelancing that will replace the DBA Act – which is expected as of 1 January 2021 – the DBA Act will be enforced only partially. At the moment, the Dutch Tax authorities only enforce in cases of malicious intent (“kwaadwillendheid”). Since malicious intent is difficult to prove for the tax authorities, the enforcement possibilities will be expanded as of 1 January 2020. From that moment on the Dutch Tax authorities are able to enforce the rules as well when clients of freelancers do not (or insufficiently) follow instructions from the tax authorities within a reasonable period.

In addition, the Dtuch Tax authorities will increase their supervision capacity regarding the DBA Act. In the third quarter of 2019 more inspectors (30 full-time equivalents) will be engaged. As of 1 January 2020, the supervision capacity will be increased again with new employees (20 full-time equivalents), resulting in a total of 80 full-time equivalents.

The Parliamentary Letter also states in which sectors the problem (the incorrect qualification of the labor relation) mainly occurs, according to the Dutch Tax authorities: health care, IT, education, hospitality, construction and retail.

Inspectorate SZW does not apply an enforcement moratorium

The Dutch Labor Inspectorate (Inspectorate SZW)also checks the qualification of the labor relation and the employment of freelancers during its regular inspections. The Inspectorate SZW does not apply an enforcement moratorium, but it does focus on certain employers and issues. Examples of some of the issues mentioned in the Parliamentary Letter are the engagement of workers as freelancers to avoid application of the collective labor agreement for the construction sector and platforms in the meal delivery, hospitality and cleaning sector trying to avoid the principle of equal pay from the Allocation of Workers by Intermediaries Act (“Wet allocatie arbeidskrachten door intermediairs”, “Waadi”).

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