Date: January 2025
Background
For years, governments have tried to implement legislation designed to eliminate inaccurate or false self-employment, largely referred to as independent contractor misclassification or disguised employment. The Netherlands are not alone in their desire to continue to evolve legislation surrounding contractor misclassification especially due to the increase in registered contactors in the Netherlands by over 80% in the past 10 years.
The Dutch authorities have set-out their intent to introduce stricter regulations and enforcement measures relating to the DBA ACT of 2016 on the 1st January 2025, by changing their approach to reclassifications from supporting any required remedial actions related to a misclassified worker to instead impose immediate fines. Previously the Tax Administration has been more restrained in their recourse towards investigating Clients and their supply chains involving the engagement of self-employed workers unless there was clear or repeated non-compliance. This restraint is referred to as the “enforcement moratorium".
As of January 1st 2025 the “enforcement moratorium” was removed and more proactive investigation related to engagement of any self-employed individual's activity, fundamentally the foundation of any reclassification is the existence in some guise of an employer/employee relationship. In the case of a reclassification case being identified by the authorities there will no longer be a need for any notice or warning allowing them to implement remedial processes, investigations and in appropriate circumstances impose penalties on the Client and their Supply Chain.
As such Netherlands clients are understandably more nervous with regards to their supply chain as in the case if a misclassification/reclassification of a contractor the Client will not only be liable for tax and social security contributions but will also face fines. Its also key to consider the impact of Duch Chain Law whereby the entre supply chain carries equal risk and liability in the case of incorrect payments of taxes or social security.
Due to a consensus that the DBA Act was too lenient and lacked the strength to change Client and supply chain behaviour, from January 2026 expect to face the implementation the “Clarification of Assessment of Employment Relationships and Legal Presumption Act / "Wet Verduidelijking en Beheersing Arbeidsrelaties" (VBAR)” replacing the DBA Act bringing with it additional classification criteria for determining the status of the work and the contractors engagement.
Changes include but are not limited to:
Relationship of Authority - based on criteria similar to those found in other EU legislation such as supervision direction and control, exclusivity, financial dependency, risk and warranty of services through to provision of tools and equipment.
Assumed Employment - which will be dependant on the use of a legal threshold of €33 per hour or below creating an assumption (a presumption) of employment where the contractor can claim employment rights (holiday pay, sick pay, pension etc).
Licensing for Recruitment Agencies in the Netherlands - delayed but still on its way.
One of the single most significant changes to the recruitment landscape in the Netherlands is the proposed introduction of licensing requirements for both Dutch and foreign staffing agencies in the scenario where they will operate a labour leasing model whereby contractors will perform services under the supervision direction and control of the client.
This legislation is designed to support the identification and prosecution of non-compliant contractual parties specifically in the temporary staffing sector.
A critical element will be introduction of a mandatory licence / certificate of conduct and an associated warranty/guarantee cash payment of €100,000. Non-compliance will result in licences being retracted and those deemed guilty being restricted from trading in the Netherlands.
Clients in particular are keeping a close eye on this process as they will be deemed liable for the compliance of their supply chain with fines to be imposed for breach of €90,000 per incident meaning a preference for shorter more transparent supply chains will also become more and more common client preference.
Initially this licensing requirement was scheduled for 1st January 2025 but this has yet again been postponed with more information expected from the Ministry of Social Affairs in the months to come.
Despite the delay, the desire for change from the Dutch authorities is evident, make no mistake the changes are coming and therefore remaining proactive whether you are a Dutch or an international business engaged in recruitment in the Netherlands is essential during the announced delay.
As an international cross-border recruitment provider with over 20 years expertise in classification, IT Works Recruitment recognises that such delays and uncertainty in government changes can create unease. However, it has been positive to see so many of our Netherlands based client base, engaged in the conversation, reaching out to establish our perspective and understand our plans in light of the recent announcement.
Proactive Compliance: Protecting Your Business from Day One
You can rest assured that we engage all of our clients and contractors in compliance discussions from day one. Our strategy to mitigate reclassification risks for all involved, begins well before any contractor engagement is finalised.
Classification Process
Wherever our Clients request our support in Europe our detailed classification processes will accommodate, this is just one part of our services to ensure compliant cross border recruitment solutions for our client's project requirements. Our expert consultants follow our country specific formulae for worker classification assessments, mitigating the risk of reclassification. We trust the compliance of our process to ensure we provide best in class protection to our Clients and Candidates alike.
“Our classification process isn’t just about ticking boxes; it’s about ensuring our clients have the right protections in place from day one. We’re committed to simplifying compliance, mitigating risk, and fostering trust with every partnership.
Stuart Quinney, CEO of IT Works Recruitment.
The Importance of Documentation for Ongoing Compliance
Without properly completed classification processes documented, conversation and audit can be far more challenging. We walk our clients through the process supporting them every - step of the way.
Conclusion
If you have current contract engagements and you are a Netherlands-based client, you are engaging Netherlands based contractors, you want to just chat things through, you are contemplating how this could affect recruitment within future projects, we are prepared and can meet you where you are to provide a pathway to navigate this evolving landscape.
Surround yourself with confidence and start to proactively challenge your supply chain to ensure that you are best place for the reforms when they do arise.
IT Works Recruitment’s comprehensive compliance processes position us as a trusted partner, protecting clients from risks and unnecessary challenges. Get in touch with us if you’d like to discuss the above in more detail.
