What exactly does the DBA Act entail?
The Deregulation of Assessment of Employment Relationships Act (DBA) was designed to combat false self-employment and create clarity about employment relationships. This law replaces the Declaration of Employment Relationship (VAR) and aims to create a level playing field between the self-employed and employees. By tackling false self-employment, the law aims to prevent freelancers and zzp’ers from working without proper working conditions.
The DBA Act was introduced to ensure that the relationship between clients and freelancers is not falsely classified as self-employed. This should ensure that there is no unfair competition and that employees are not wrongly hired as self-employed, which can lead to less social security and insurance. Read more about this in our white paper.
Who is covered by the obligations of the DBA Act?
The DBA Act applies to both freelancers and the clients they work for. It is important for both parties to assess whether there is a true self-employment relationship or an employment relationship. The law places the responsibility on both the freelancer and the client to ensure that there is no false self-employment.
Criteria that determine when the law applies include the degree of authority, the obligation to perform personal work and whether there is payment for services rendered. If these criteria are met, an employment relationship may exist and both parties are required to comply with the law.
What are the risks for freelancers if they do not comply with the DBA Act?
If freelancers do not meet the requirements of the DBA Act, they risk fines and legal complications. The Inland Revenue can impose additional levies on clients if there is false self-employment. This means that the client still has to pay social contributions and taxes, which can lead to financial problems for both the freelancer and the client.
Moreover, failure to comply with the law may result in freelancers being viewed as employees, with all the obligations that entails. This can impact their self-employed status and the freedom with which they perform their work, which can ultimately affect their professional relationships and earnings.
How can a freelancer comply with the DBA Act?
To comply with the DBA Act, it is important that freelancers draw up clear agreements with their clients. These agreements should clearly describe the nature of the employment relationship and indicate that there is no relationship of authority. This helps to avoid misunderstandings and ensure self-employed status.
In addition, it is wise to regularly evaluate the collaboration and make adjustments if necessary. Avoiding fixed working methods and maintaining some degree of replaceability can help maintain self-employed status. This allows freelancers to perform their work in a way that is in line with the law.
What changes are planned for the DBA Act?
Some changes have been announced for the DBA Act that could potentially affect freelancers and clients in the future. Starting in 2025, the enforcement moratorium will be lifted, meaning that the Tax Office will more actively check for false self-employment. This may lead to more compliance with the law, but also raises questions about practical feasibility.
There is also talk of the introduction of new legislation, such as the VBAR Act, which should provide further clarification on labor relations. These changes could dramatically affect the current situation for freelancers and clients, making it important to stay abreast of the latest developments and adjust your practice accordingly.
If you, as a freelancer or client, have questions about the DBA Act or need help navigating this complex matter, we at WerfSelect can support you. We are ready to help you find the right balance between independence and security in your employment relationships.
