Self-employed workers uneasy about approach to sham self-employment
The Dutch Tax and Customs Authority is planning to start enforcing income tax and contribution obligations again following a moratorium lasting several years. The tax authority is doing this in a move to combat sham self-employment; a dossier that continues to be a huge obstacle for the Dutch House of Representatives. Barend Barentsen, Professor of Labour Law, discusses this on radio station ‘BNR Nieuwsradio’.
Sham self-employment occurs when somebody presents themselves as a self-employed worker, while they are actually employed. The Dutch Tax and Customs Administration will introduce additional tax assessments, adjustments and fines as of 1 January 2025, though not with retrospective effect prior to that date. With the 90 FTEs that the tax authority has made available for this purpose, the chance of being caught out will not be high. However, there is a large shock factor in many industries, which has led to a reluctance to hire self-employed workers, BNR news radio reports.
Professor Barentsen refers to instances of working people being made to sign contracts against their will under ‘soft coercion’ as self-employed workers as misconduct. ‘People would rather be employed,’ he adds. But this is by no means true for everyone. Professor Barentsen also outlines the macroeconomic problem caused by sham self-employment: fewer people contribute to the social security system, and so it is a ‘self-reinforcing’ process.
However, restrictive working hours and poor terms of employment for employees in certain industries mean that ‘people with little room for manoeuvre are still choosing to be self-employed,’ explains Professor Barentsen.
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