The Clarification of Assessment of Employment Relations and Presumption of Law Act introduces three main elements to assess authority
In the Act, the ‘working in the service of’ standard (the authority criterion) from Section 7:610 of the Civil Code is further structured and fleshed out by three main elements:
- work-based steering (A),
- organisational embedding (B), and
- working at own account and risk (C)
In certain circumstances where the consideration of the three main elements is inconclusive, there is an additional element (C ) that can be included in the assessment.
Elements and indications of employer authority
The three main elements of authority are further coloured by an exhaustive list of indications for the existence of an employment contract, which will later be worked out separately in an order in council. The indications have already been explained in the explanatory memorandum and included below.
Work content management (element A)
- The worker is authorised to give directions and instructions on how the worker should perform the work and the worker must also follow them;
- The worker has the ability to monitor the work of the worker and is authorised to intervene on that basis.;
Organisational embedding (element B)
- The work is carried out within the organisational framework of the employing organisation;
- The work is part of the organisation’s core business;
- The work is structural in nature within the organisation;
- Work is done side-by-side with employees doing similar work.
Own account and risk (element C)
- The financial risks and results of operations lie with the working;
- When carrying out the work, the worker is responsible for tools, aids and materials himself;
- The worker is in possession of a specific education, work experience, knowledge or skills, which is not structurally present in the employer’s organisation;
- The working person acts independently while working;
- There is a short duration of the assignment and/or a limited number of hours per week.
Behaviour of working in economics (additional element C )
- The working has several clients per year;
- The working spends time and/or money on gaining a reputation and finding new clients or customers;
- Working has business investment of some size;
- The worker behaves administratively as an independent entrepreneur: is registered with the Chamber of Commerce, is a VAT entrepreneur and/or is entitled to the tax benefits of entrepreneurship (such as entrepreneurial allowances).
Legal presumption of employment
Besides clarifying the legal framework for determining whether a worker is an employee or self-employed, an additional legal presumption will be introduced based on an hourly rate. At a rate below €32.24 excluding VAT (reference date 1 July 2023), an employment contract will be presumed. Thus, an employment contract does not automatically arise, but the worker can invoke the legal presumption of employment in case of a rate below this standard and more easily claim an employment contract (with his own employer and, if necessary, through the civil courts). This does involve a rebuttable legal presumption. This means that the employee can try to prove that there is no employment relationship and that he or she is indeed self-employed.
Scheduled date of entry into force of the Clarification of Employment Relationship Assessment and Legal Presumption Act
The intended date of entry into force of the proposed rules is 1 July 2025, subject to feasibility. No transitional law is foreseen. This means that the rules will take effect immediately upon entry into force. And thus, the rules will apply to any employment contract existing on 1 July 2025 and to employment contracts starting on or after that date.
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