When are you genuinely self-employed, and when is it bogus self-employment?

The question comes up almost every week, usually as a worry: am I going to be treated as bogus self-employed? Or, from the other side: are we at risk if we hire this contractor? The same three axes decide it, and they can be explained without a law degree.

What follows is not a verdict. We assess and we explain; the tax authority rules. Every indication below points towards an outcome: none of the three decides on its own, and the weighing is the work.

Who decides how, when and where the work happens?

The first axis is about direction. Not about whether people get along, but about who has the final say on how the work is done.

What is looked at in practice:

• May the client give instructions about how the work is carried out? Note the wording: it is about may, not about does. A client who has the right to direct but never uses it still counts here.
• Who sets the hours and the place of work? Fixed hours, a duty to be present, and time registration in the same system as the staff point towards employment.
• May the contractor send a substitute? If someone else can do the work when they are unavailable, that points towards independence. If it must be done personally, it points the other way.
• Is it an obligation of effort or of result? A defined result that is settled on points towards independence; running along on hours points towards employment.
• Are there appraisal or performance reviews? Those belong to an employer, not to a client.

Does the assignment sit inside the organisation, or alongside it?

The second axis is the hardest, because this is where the details live that people do not realise count. It is about organisational embedding: is this work part of the ordinary run of things, or does it sit next to it?

• Do the client’s own staff do the same work? If much of the same work is also done by people on the payroll, that is a strong indication of embedding.
• Why was it outsourced? Knowledge the organisation does not have points towards independence. A shortage of hands points the other way.
• Do the staff regulations apply? The same house rules, the same leave procedure, the same mandatory courses: that is the organisation closing around the assignment.
• Does the contractor get an email address on the client’s domain? This is the smallest and at the same time the most common one. It nearly always happens for practical reasons, and it counts all the same.
• Do they join staff events? The Christmas drinks, the team outings, the monthly department meeting: none of these decides anything on its own, but they fill in the picture.
• Do they manage the client’s staff? That points strongly towards a position inside the organisation.

Who carries the risk if it goes wrong?

The third axis is about entrepreneurship: does the contractor genuinely work at their own expense and risk, or only on paper?

• Who pays for rework? If the contractor has to fix a mistake in their own time, that points towards independence.
• Who is liable for damage? And is that liability insured?
• Do they use their own name towards the client’s relations? Or are they indistinguishable from the client’s own staff to the outside world?
• Are they identifiable as working for that organisation, with a business card and a signature block of the client? Then that points towards embedding.

Why we assess up front, not afterwards

With us, self-employed and freelance assignments run through our partner Servorg, using a checklist we also put to the client. That list walks exactly these three axes, and both parties sign it before the work begins.

That is not a formality, and the reason is blunt: if it goes wrong, the bill lands with the client. If the tax authority rules afterwards that the work was bogus self-employment, Servorg recovers the assessment and the fines from the client. We would rather tell you that beforehand than afterwards.

That is why our requirements are stricter for the client than for the self-employed professional. It sounds the wrong way around, and it is meant to be: most of the risk comes from how the assignment itself is set up, from who directs it, and from whether the work can be defined as a distinct piece. That is where the ground is won, so that is where the bar is highest.

If an assignment does not pass, we offer it where possible as a secondment through one of our other brands. The work then stays; only the form in which it is carried out changes.

And the Wtta, does that come on top?

Yes, but later, and it is a different subject. The Dutch Labour Provider Admission Act is about who may supply labour, not about whether an assignment is self-employed work. The timeline sits on our self-employed and freelance page and on the procurement page, in one place and with the date on which we checked it. No labour provider has been admitted yet today.

Want to know whether a specific assignment passes? Put it to us. It costs a conversation, and in the worst case it saves a tax assessment.