VBAR and the Self-Employed Persons Act: Greater Clarity on Hiring Self-Employed Workers, but Entrepreneurs Must Remain Vigilant

For many business owners, hiring self-employed contractors is no longer just a practical decision, but also a legal risk. Since the debate over bogus self-employment has intensified, clients have noticed that a single misjudgment can lead to inquiries from the tax authorities, disputes over payroll taxes, or even claims from workers who later argue that an employment contract actually existed. At the same time, there is broad recognition that bogus self-employment schemes must be addressed without unnecessarily affecting genuine self-employed individuals. Striking that balance, however, proves difficult in practice.

An additional component of the VBAR: the legal presumption in the case of a low rate

The Act on Clarification of the Assessment of Employment Relationships and Legal Presumption (VBAR) aims to establish a better framework for classifying employment relationships. A recent amendment has introduced a new element that is particularly relevant for business owners: a legal presumption of an employment relationship when a self-employed person works for an hourly rate below a certain threshold (to be determined). In the market, this is generally thought to be a range around the mid-30s euros per hour.

The rationale behind this legal presumption is clear: at the “lower end” of the labor market, it must become easier to address bogus self-employment. A worker with a low rate is thus given a stronger position to argue that the collaboration is essentially an employment contract.

For clients, this immediately raises the mirror question: if the rate is above that threshold, is it automatically safe? The short answer is: no. A rate can be a relevant indicator, but it is not a free pass. Ultimately, the classification depends on the overall picture of the working relationship: how is the work directed, who bears the risk, is there genuine entrepreneurial freedom, and how is the relationship actually structured and carried out.

Why business owners shouldn’t rely solely on hourly rates

In practice, we see that it is tempting to “reduce” compliance regarding the hiring of self-employed contractors to a mere rate agreement. This is understandable, but legally risky. A higher rate can, in fact, coexist with characteristics that still point toward an employment relationship, for example if:

• the self-employed contractor is a structural part of daily operations;
• the client effectively determines when and how the work must be done;
• replacement is effectively impossible;
• there is little to no entrepreneurial risk (e.g., continued pay in case of absence, no personal investments, no personal marketing or client acquisition).

Entrepreneurs would therefore be wise to view the rate as just one factor within a broader “employment relationship assessment”: contract, work instructions, scheduling, performance reviews, reporting lines, company resources, and the way the parties present themselves to the outside world.

The Self-Employed Persons Act as a new guide: two assessments and a sector-specific layer

Alongside the VBAR, a legislative proposal has been introduced that is increasingly taking center stage in the debate: the Self-Employed Persons Act. Its aim is to create a clearer and more predictable framework for the self-employed issue. The approach is practical: first, determine whether someone is actually operating as a self-employed person, and then whether the working arrangement maintains sufficient distance from the traditional employer-employee model.

1) Self-Employment Test: The entrepreneur must live as an entrepreneur

The first step is a self-employment test, where the key question is whether the self-employed person actually works at their own expense and risk and can also sustain this organizationally and financially. This involves a combination of factors, including: orderly record-keeping, demonstrable entrepreneurial behavior in economic transactions (such as investing in one’s own business assets, having multiple clients, and conducting one’s own business development), and having provisions for disability and retirement. The underlying principle is that self-employment is not merely a contractual arrangement but also an entrepreneurial profile.

2) Employment Relationship Test: How independent is the assignment really?

If the basis for self-employment is sound, the focus shifts to the structure of the collaboration. The working relationship test primarily revolves around the question of whether the parties consciously choose to enter into a contract and whether the self-employed person actually has the freedom to plan and organize the work independently. It is important that the client does not provide direct, day-to-day supervision, as is the case with employees.

It is noteworthy that the criterion of “embeddment in the organization” (performing work that is also done by employees) would no longer be a decisive factor in this approach. After all, in many sectors it is inevitable that external parties perform similar tasks; the key considerations are the degree of independent control and the absence of characteristics of authority.

3) Sector-specific presumption of legal status: additional rules for high-risk sectors

In addition, sector-specific legal presumptions are being considered: additional guidelines in sectors where the risk of bogus self-employment is higher. A frequently cited example is transportation: if a “self-employed person” drives a vehicle provided by the client rather than using their own equipment, this may weigh more heavily in favor of a salaried employment relationship.

Review and Enforcement: An Independent Commission for Cases of Doubt

A practical element of the proposed system is the review by a separate commission that can publicly assess cases of doubt. The idea is that business owners and the self-employed will thus receive clarity more quickly, and that enforcement agencies (such as the Tax and Customs Administration) can align their approach with those rulings. For clients, this can increase predictability, provided the criteria are consistently applied in practice.

What does this mean for clients and self-employed professionals now?

Although legislation is evolving, entrepreneurs can already take steps today to mitigate risks:

1. Make the partnership “audit-proof”: ensure that contracts, invoicing, substitution agreements, liability, proprietary tools, and communication with clients align with self-employment.

2. Carefully structure day-to-day management: focus on results and deliverables, not on presence, schedules, or hierarchical instructions.

3. Conduct periodic reviews: relationships can shift over the course of long-term assignments. Therefore, evaluate every 6–12 months whether the actual execution still aligns with a contract for services.

4. Clearly define the freelance arrangement: consider their own rate structure, their own terms and conditions, multiple clients, and demonstrable business development.

Those who work professionally with freelancers and self-employed individuals would do well to approach hiring self-employed workers not only from a tax perspective, but also from the standpoint of contract management and labor law risk management. A good “self-employed contract” helps, but practice ultimately determines the label.

Frequently Asked Questions About VBAR, Bogus Self-Employment, and Hiring Freelancers