As of 1 January 2025, the enforcement moratorium (handhavingsmoratorium) under the Employment Relationships Deregulation Act (DBA Act) will be lifted. This means that from that date, the Dutch tax authorities will start enforcing on pseudo self-employment. On 1 November 2024, the tax authorities published a decision and assessment framework regarding the assessment of employment relationships. This framework is based on legal principles and case law, with the tax authority specifically referring to the assessment framework of the Deliveroo ruling. In this news item, we briefly discuss the potential consequences if a worker turns out to be an employee. We also briefly discuss the options available if it is unclear whether the worker qualifies as a self-employed individual.
Deliveroo-criteria
The lifting of the enforcement moratorium is one of the pillars to try to restore the balance in the Dutch labour market and make the regulations around self-employment more future-proof. For background, please refer to our newsletter of 13 September 2024 and our newsletter of 9 October 2024. Meanwhile, the Supreme Court's Deliveroo criteria have been made more concrete several times in lower case law. Although the way in which these criteria should be interpreted has not yet been fully crystallised, we have prepared a checklist so an assessment can be made as to whether a worker is self-employed or an employee. In this context, it is important to note that the tax authorities follow civil law. So, the civil court's interpretation of the Deliveroo criteria also applies to the tax authorities.
Consequences of requalification
It is advisable to assess for each worker whether they are self-employed or an employee. If you have workers with whom you have entered into a contract for the provision of services (overeenkomst van opdracht) while it is clear from the completed checklist, that these workers are actually employees, this means that from 1 January 2025 payroll taxes must be withheld from the payments to the worker and social security contributions and health insurance contributions must be remitted to the tax authorities. Therefore, if (for example) in June 2025, self-employed persons are still working for you who are actually employees, the tax authorities may impose retroactive levies on payroll tax and social security contributions as of 1 January 2025.
You should also be aware that a pension scheme may apply to the worker retroactively, especially if your company is covered by a compulsory industry pension fund. Should there be a retrospective levy from the tax authorities, the data from a payroll tax return will end up in the Employee Insurance Agency’s (UWV) policy administration. A large number of parties have access to this policy administration, including compulsory industry pension funds. Therefore, if a retroactive correction of the payroll tax return is required, this will be visible in the policy administration and a message could be sent from the policy administration to the industry pension fund. You then run the risk that the industry pension fund will also turn to you.
If you have placed your pension with an insurer, the following applies. The administration agreement an employer concludes with the pension administrator contains a clause obliging the employer to let employees participate in the pension scheme. This means that there is a contractual obligation towards the pension administrator to accommodate pension accrual for employees who qualify as such.
What options are available?
The next question is then what to do in respect of workers whose qualification as self-employed is unclear. We see several possibilities.
If the Deliveroo criteria show that the worker qualifies as an employee, then it is worth considering offering the worker an employment contract as of 1 January 2025. In that case, the tax authorities will not impose a retrospective levy. However, the pension fund could still impose post-tax levies. The workers could also file a civil claim against you, for instance claiming that they were not paid during sickness or holidays in the past. To resolve this situation, you can try to reach a settlement agreement (VSO) with the worker(s). Note that such settlement agreement always requires a tailor-made solution. The ambiguity resolved by the VSO must be formulated precisely and tailored to the situation at hand. We are happy to assist with that.
Alternatively, you can hire the worker through his own private limited company (BV), if the worker has one. However, this is by no means a conclusive solution. While a contract between two companies is by its nature not an employment contract, there is (from a tax point of view) no unlimited freedom to structure work through a BV if there is no real interest behind it. If the BV has no real value, the tax authorities will look through that structure. Thus, the company must have a demonstrable and real significance in offering the services to the principal. We would be happy to advise you on the question of when a company has real interest and what civil law options are available.
An intermediary can also act as a contracting party (intermediary model). The worker then enters into a contract for the provision of services with the intermediary. However, the intermediary also runs the risk of re-qualification, if the worker continues to work under your direction and supervision. An employment contract is then created between the intermediary and the worker. Intermediaries will therefore often have included in their general terms and conditions that if the worker is found to be working under your direction and supervision, any resulting financial loss will be recovered from you. The tax authorities may also turn to you directly as in the context of hirer and chain liability.
An alternative is that you do not hire the worker as a self-employed person through an intermediary, but as a temporary worker. This means that the worker enters into an employment contract with the intermediary, while you can simply manage and supervise the worker. The intermediary then pays payroll taxes and social security contributions and pensions and bears (almost) all the risks of being an employer. The hirer's liability risk can then be ruled out by making payments into a blocked account of the intermediary (G-rekening). Naturally, there are costs involved.
Finally, you can of course consider parting ways of this these workers as of 1 January 2025. Even then, it seems advisable in certain cases to conclude a VSO. For points of attention in that context, please refer to the scenario in which you would offer the workers an employment contract.
Should you have any questions following the above, please feel free to contact one of us. We will of course be happy to help you further.
