Netherlands: Latest developments in working life Q4 2019

A new draft law on the working conditions and pay solo self-employed workers and progress on climate action are the main topics of interest in this article. This country update reports on the latest developments in working life in the Netherlands in the fourth quarter of 2019.

Consultation on proposed law for solo self-employed workers

In October 2019, the Ministry of Social Affairs and Employment and the Ministry of Finance submitted a joint draft law on solo self-employed workers for online consultation. The proposed law has two components which connect with the government’s coalition agreement and the new package of laws for a balanced labour market that comes into force in January 2020. ^[1]

The first component of the proposed law is that from January 2021 all solo self-employed workers should receive a minimum wage of €16 per hour. This is aimed at ensuring solo self-employed individuals (self-employed without employees) have the financial wherewithal to build up social security and to have the time to conduct administrative work related to their enterprise. ^[2] This part of the proposal is based on the growing number of solo self-employed workers who are in unequal employment relationships, for example, the case of an employer hiring a solo self-employed worker to avoid the need to make social security contributions. ^[3] This type of fake entrepreneurship (schijnzelfstandigheid) is something that the Dutch government is trying to address.

The second component of the proposed law is designed to clarify the nature of the working relationship between a solo self-employed worker and the organisation employing them. It obliges solo self-employed workers earning more than €75 an hour to sign a self-employed declaration with their temporary employer that delineates the nature of the employment relationship ^[4] and establishes which income tax bracket the solo self-employed worker is in. The aim of the declaration is to reduce any administrative or legal matters during or at the end of the employment relationship. To put this second component into effect, the government is developing an online module to help establish whether a solo self-employed worker is legally considered to be self-employed, in an effort to combat bogus self-employment.

Social partners were fairly critical of the proposed law after reviewing the online consultation. The Confederation of Netherlands Industry and Employers (VNO-NCW) and MKB Nederland, which also represents SMEs, indicated that the proposed law does not help poorly paid or well-paid solo self-employed workers. They expressed the view that the minimum wage is restrictive and will lead to more administration for self-employed workers ^[5] and that well-paid self-employed workers, who earn over €75 an hour, will also be faced with a higher administrative burden. One of the two national trade unions, the National Federation of Christian Trade Unions (CNV), echoed these concerns and said that wage levels restrict self-employed workers more than they help them. The CNV noted that a failure to maintain working time registration and other administration tasks can lead to fines of around €4000. ^[6] Self-employed workers, who are engaged in studies alongside their work may not be aware of these stringent rules and could receive an unpleasant surprise (in the form of a large fine).

The government will revise the proposed law following the conclusion of the online consultation and send it to the senate and parliament for final review.

Climate action progress

Discussions regarding the environment and sustainable changes are well under way. The Climate Accord, signed in the summer of 2019, has led to much discussion in the private sector about how work will be affected, notably in farming and construction. The European Commission’s Green Deal has been lauded by social partners, including the VNO-NCW, who are in favour of an international approach to climate action. ^[7] This theme is likely to dominate the policy agenda for next year for both employers and workers, as well as social sectors such as vocational education and training.