Staff at Wageningen University & Research who regularly hire freelance professionals have lots of questions about the Assessment of Employment Relationships (Deregulation) Act (DBA Act). The act is also increasing the amount of paperwork.
This is what Marleen de Vries and Johan Kanis at Corporate HR say. The DBA Act, which came into effect in May 2016, was intended to put an end to bogus self-employment. It replaces the Declaration of Independent Contractor Status (the VAR) that freelancers used to be able to use to show they really were self-employed. The DBA Act enables stricter checks. It also makes the organization hiring the freelancer liable in the event of an infringement rather than the freelancer, as was the case for the VAR.
De Vries and Kanis have had dozens of requests for assistance since May 2016 from WUR staff who want to hire a freelancer. They have also had complaints about the extra paperwork due to the DBA Act.
De Vries says that departments who want to engage freelancers, such as lecturers, editors or translators, should ask themselves three questions. Is the freelancer in a subordinate position with respect to the client? Is personal work being delivered (in other words, can only the freelancer do the work)? Is money being paid for it? If the answer to all three questions is yes, this is really an employer-employee relationship and hiring a freelancer is therefore not permitted. The department should then look for an alternative solution such as a payroll setup. The freelancer and client can also sign a model contract that clearly states the assignment, stipulates the mutual responsibilities and contains a declaration by both parties that this is not an employer-employee relationship. ‘If freelancers are not prepared to sign the model contract or to go for a payroll solution, they won’t be hired. The risk of fines by the tax authority is just too great,’ says Kanis.
It should be noted that the tax authority will not be enforcing the DBA Act until January 2018.