What does the DBA law mean for freelancers?
What does the DBA law mean for freelancers?
Freelancing has evolved significantly in recent years, partly due to changing legislation such as the Deregulation of Labour Relations Assessment Act (DBA law) and the newer version, the Fixed Hiring of Labour Relations Act (VBAR). Both clients and freelancers need to stay informed about these regulations to avoid unnecessary risks and ensure sustainable collaborations. In this blog, we explain what the DBA law means and the impact it has on working as a freelancer.
What is the DBA law?
The DBA law was introduced in 2016 to replace the Declaration of Employment Status (VAR). The goal of this law is to combat false self-employment. In practice, this means that the Tax Authority checks whether the relationship between a client and a freelancer is truly an independent working relationship or if there is a disguised employment relationship. The government aims to prevent freelancers from performing the same tasks as employees without having the same rights and obligations.
Under the DBA law, responsibility lies not only with the freelancer but also with the client. Both parties must establish that there is no hierarchical relationship or obligation for personal labor. This must be documented in an agreement, often referred to as a model contract. This proves that the freelancer works independently and not under the same conditions as an employee.
What does the DBA law mean for freelancers?
For freelancers, it’s crucial to demonstrate that they operate as independent contractors. Assignments must be well-documented, and any suggestion of a hierarchical relationship with the client should be avoided. Freelancers must also meet the entrepreneurship criteria set by the Tax Authority.
Disadvantages of the DBA law for freelancers
In practice, the introduction of the law caused significant uncertainty for both clients and freelancers. The rules were not always clear and were interpreted differently by various parties.
As a result, many clients chose to hire fewer freelancers to avoid potential penalties. This led to a decrease in available work for freelancers and created uncertainty in the market.
To reduce these uncertainties, the government decided in 2018 to largely suspend the enforcement of the DBA law. However, this does not mean the law is no longer in effect; clients must still demonstrate that their collaboration with a freelancer complies with the regulations. The suspension mainly applies to clients acting “in good faith,” but not to those deliberately promoting false self-employment.
Read more: All about false self-employment for freelancers.
The DBA law in 2025
Starting January 1st, 2025, the government will take a stricter stance against false self-employment by abolishing the enforcement moratorium. This means that the Tax Authority will intensify its checks on disguised employment relationships.
Additionally, a new legislative proposal is being developed called ‘Clarification of Labour Relations Assessment and Presumption of Employment (VBAR)’. This proposal aims to better protect freelancers and encourage employers to offer fair employment contracts.
The impact of the DBA law on freelancers
With the removal of the enforcement moratorium, the Tax Authority will intensify checks on false self-employment. This means freelancers must be better prepared, take on more responsibility, and critically assess their working relationships.
Freelancers must stay informed about legislation and manage their contracts carefully to avoid issues.
By staying updated on the latest legal developments, you ensure your working relationships comply with current regulations, prevent surprises, and foster sustainable collaborations.
Do you want to make sure everything is in order as a freelancer? We are happy to help you eliminate all risks and review the necessary documents, so you don’t have to worry. Contact us for advice on the DBA law without obligation.