After the official installment of the Rutte III cabinet on 26 October, the amendment to the DBA Act is getting closer and closer. Although the enforcement of the new regulation has been postponed, it is good to know as a self-employed person what your position on the labor market could be. Do you as a freelancer already know your future position?
As a freelancer, it is important to realize your position on the labor market. But how do you determine your position in the market and on the basis of which criteria is this determined? In this article we have tried to clarify the position determination criteria consisting of three factors. These factors are: the nature of the assignment, the duration of the assignment and the hourly rate of the assignment. It is important to know that the nature of the assignment is divided into regular and non-regular business activities. Two diagrams have been drawn up to visualize the position determination.
Position with regular business activities
The first visualization relates to the regular business activities. These are the primary activities within an organization, for instance delivering pizza’s when you work at a pizzeria.
In the figure below, you can see that the highest pay grades in regular business activities can request an ‘opt-out’ arrangement, which is an agreement not to deduct income taxes. This only applies is the assignment does not last longer than 12 months. In the middle segment, you can see that the model agreements are backed by an client declaration and a web module. The clients are responsible for applying for such a declaration. That is important to determine whether income tax and/or other taxes have to be paid to the IRS. The client declaration can be acquired by filling in a checklist/questionnaire on a web module, which is being developed by the government. Although, at the moment, a lot is unclear about what that web module will look like exactly, the idea is that the new system will be a lot more transparent than the old system.
In addition to changes in the middle and top segments, there is also greater transparency in the lower segment, where the minimum hourly rate is set between 15 and 18 euros. If the hourly rate is less than the minimum, in the case of regular business activities, there always has to be a labor agreement.
Position in non-regular business activities
The difference in terms of the position on the labor market between regular and non-regular business activities has to do with the duration of the assignment in the lower segment. If the assignment lasts longer than three months, the new regulation indicates that a labor agreement has to be drawn up. For the middle and top segments, the same rules apply as with the regular business activities.
Compared with previous laws, the position is much clearer, as the bill now is formed. The former VAR and BGL consisted of several statements that had to be applied for. The design of an addition of a client statement by means of a web module ensures that clarity can be created for each party. Another advantage is that the number of cases of inadvertent false self-employment and competition on terms of employment will decrease.
Relating to WIBA IT
What that means for WIBA IT. As indicated earlier, WIBA IT will keep using the current model agreements until we know more about the exact details of the changes. We will keep a close watch on all the changes and as soon as there is anything to report, we will immediately post a message on our website. Of course, we also want to keep our partners and everyone else for whom this is an important issue up to date. So if you are a freelance, supplier or client and this subject is relevant to you, make sure to follow us on LinkedIn, Facebook en Twitter and we will keep you informed.