The Self-Employed Persons Act as a new guide: two assessments and a sector-specific layer
The Self-Employed Persons Act will now play a significant role in addressing bogus self-employment. The aim is to create a clearer and more predictable framework for issues related to self-employed individuals. The approach is practical: first, determine whether someone is actually operating as a self-employed individual, and then assess 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
As a client, when am I most at risk of encountering bogus self-employment?
When the self-employed person effectively works as an employee: fixed hours, structured supervision, little entrepreneurial freedom, and no personal liability.
Is an hourly rate above the threshold enough to be safe?
No. A higher rate can help in the assessment, but the actual nature of the collaboration (authority, planning, execution, and risk) remains decisive.
What does the legal presumption in the VBAR mean in plain language?
With a low rate, the worker has an easier basis for arguing that an employment relationship exists. The client must then demonstrate why it is, in fact, a contractual relationship.
Can a self-employed person choose not to be considered an employee?
The parties’ choice is a factor, but it is not decisive if the actual execution of the work exhibits characteristics of an employment relationship.
What can I include in my self-employed contractor contract to limit risks?
Include a clear description of the deliverables, flexibility for independent scheduling, options for substitution, liability on the part of the contractor, and specify that the self-employed contractor has their own business resources and multiple clients (to the extent that this is accurate).
What are some practical “red flags” to watch for in long-term temporary staffing arrangements?
An exclusive contract, being included in staff schedules, performance reviews, internal email addresses as if they were regular employees, and consistently working under direct supervision.
Which sectors are more likely to face increased scrutiny?
Sectors where low rates, routine work, and the use of the client’s equipment are common (such as transportation and logistics) are particularly likely to come under scrutiny.
How can a law firm assist businesses in this regard?
By conducting a risk analysis of the employment relationship, redesigning the staffing structure, drafting or updating self-employed contractor agreements, and providing support in response to inquiries or investigations by enforcement agencies.
Questions?
Do you have any questions regarding this article or employment law in general? Please feel free to contact our specialized attorneys.
Update April 21st:
The government is scrapping part of the Vbar | Fruytier Lawyers in Business
