On Friday, October 6, 2023, the Clarification of Assessment of Employment Relations and Legal Presumption Act of the outgoing Minister of Social Affairs and Employment was placed on the internet for consultation. The aim of this bill is to put an end to false self-employment by clarifying the rules on the qualification of the employee and the self-employed. If passed, this law will have major consequences for both employers and the self-employed. It is intended that this law will enter into force on July 1, 2025. No transitional law applies, which means that the measures have immediate effect upon entry into force. The internet consultation was open until November 10, 2023. After this, the Council of Ministers will discuss how the bill will proceed. The bill can then be amended if necessary.
In addition, the Cabinet also aims to improve and prepare enforcement now that it intends to abolish the enforcement moratorium from the 1st of January 2025. The aim is to have the Tax Authorities actively collaborate with and provide assistance to parties who are willing and able to comply with tax and social obligations, and to focus more on files where there is uncertainty about the qualification of the employment relationship.
What will change?
The aim of the law is to clarify whether someone works as a self-employed person or as an employee. For this purpose, the ’employed by’ criterion will be specified. The proposed Section 7:610 (2) of the Civil Code considers the performance of work to be employment if:
– the work is performed under work-related direction by the employer; or
– the work or the employee is organizationally embedded in the employer’s organization; and
– the employee does not perform the labour for his own account and risk.
Additionally, as per the proposed Section 7:610(3) of the Civil Code, if the integration into the employer’s organization is more prominent than carrying out the work at one’s own account and risk, then the work is considered to be performed in the service of an employer.
Finally, the proposed art. 7:610aa of the Civil Code establishes a legal presumption. If a worker can prove an hourly rate lower than EUR 32.24, an employment contract is presumed. It is then up to the employer to prove that there is no employment contract.
Consequences
If the law enters into force on July 1, 2025, no transitional law will apply. The immediate effect means that the rules apply to every existing and future employment contract and to every agreement with a ‘self-employed person’ who will from then on be qualified as an employment contract under the legislation. It is therefore important to assess now whether agreements with self-employed workers who perform work for your organization may qualify as employees under the proposed legislation. Based on this legislation, it will no longer be easy for a person to qualify as self-employed. Even if work is carried out at the worker’s own risk and expense, there will still be an employment contract if the management or embedding in the employer’s organization is more important.