How to comply with the DBA legislation?

Introduction to the DBA Law

The Deregulation Assessment of Employment Relationships Act (DBA) was introduced in 2016 as a replacement for the Declaration of Employment Relationship (VAR). This law aims to clarify the employment relationship between clients and contractors (freelancers). With the introduction of the DBA law, both parties must jointly assess whether there is an employment relationship or a contract. This has significant implications for how freelancers and their clients work together. Since its introduction, the law has caused much debate and uncertainty in the labor market.

Purpose of the DBA Law

The primary goal of the DBA law is to combat false self-employment. False self-employment occurs when someone works as a self-employed person on paper but actually functions as an employee in practice. The law seeks to create more clarity regarding the nature of employment relationships between clients and freelancers. Through this clarification, the government aims to prevent employers from wrongly using freelancer arrangements to save costs. At the same time, the law aims to protect genuine freelancers and strengthen their position in the labor market.

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Key Points of the DBA Law

An important aspect of the DBA law is the use of model agreements. These agreements, approved by the Tax Authorities, provide guidelines for the collaboration between the client and the contractor. Both parties are jointly responsible for correctly assessing and documenting their employment relationship. The law also introduces criteria for assessing employment relationships, such as the degree of control, the nature of the work, and the duration of the assignment. These criteria help determine whether there is an employment relationship or a freelance assignment. Correctly applying these rules is crucial to avoid issues with the Tax Authorities.

Enforcement and Moratorium

After the introduction of the DBA law, there was much unrest and uncertainty. In response, the government established an enforcement moratorium, meaning the law was temporarily not enforced. This moratorium has been extended several times to give clients and freelancers more time to adapt to the new rules. Currently, there is limited enforcement, where action is only taken in cases of malice. However, there are plans to fully resume enforcement of the DBA law starting January 1, 2025. This means that companies hiring freelancers could face fines again if there is disguised employment.

Impact on Freelancers and Clients

The DBA law has significant consequences for both freelancers and their clients. Clients must now consider more carefully whether they can hire someone as a freelancer or whether an employment contract is necessary. This could lead to more reluctance in hiring freelancers, for fear of possible fines. For freelancers, the law means they may have a harder time getting assignments and will need to invest more in demonstrating their independence. The law also affects the flexibility of the labor market, as the boundaries between different forms of work are becoming sharper. Both parties must now pay more attention to structuring their collaboration to comply with legal requirements.