Assessment of bogus self-employment and integration into the enterprise

When assessing whether a self-employed professional is truly independent or in reality a (false) employee, the concept of “embedding” plays an increasingly important role: the extent to which someone has become part of the client’s organization. Embedding exists alongside—not instead of—the well-known question of whether a hierarchical relationship exists. This is important for SMEs: some current freelancers may no longer be able to continue working on that basis. Below, you can read what embedding entails and how to limit the risk of false self-employment.

Why does the government monitor bogus self-employment?

Many companies work with freelancers. This is often more attractive than hiring staff, but the protection afforded to a self-employed professional is less extensive than that of an employee. The government therefore wants to crack down more strictly on bogus self-employment, where someone is formally an entrepreneur but is in fact an employee. Reasons:

• the state misses out on tax revenue;
• in some sectors, self-employed workers displace salaried employees;
• Bogus self-employed workers lack the protection that is actually due to them.

TODO_VERIFY: Legislation and enforcement policy regarding bogus self-employment (including the assessment of employment relationships and supervision by the Tax and Customs Administration) are constantly evolving — check the current state of affairs before relying on this.

What is embedding?

Embedding concerns the extent to which someone is integrated into the client's organization. Two extremes make this clear:

• Not embedded: a self-employed professional who takes on a job occasionally — even if it lasts longer, such as six months of renovation work in an office building.
• Well embedded: someone who has been working in the company as a freelancer for years, maintains the company's communication style, and operates under the responsibility of the company.

Someone who is strongly embedded may no longer be able to continue working for that company as a freelancer in the future.

Embedding is not the only criterion

Between the two extremes lies a wide grey zone, which is further defined partly by case law. Embedding exists alongside the requirement that a relationship of subordination is absent. While a true self-employed professional must tolerate some authority from the client, they simultaneously enjoy a great deal of freedom: they can often decide for themselves how and when to work (although this may vary on a case-by-case basis).

In practice, three factors are considered to determine whether someone is a self-employed professional or a bogus self-employed person:

1. the degree of independent entrepreneurship within the employment relationship;
2. the extent to which instructions are given and supervision is exercised;
3. the extent to which the work is organizationally embedded.

Embedding is therefore an additional criterion that does not replace the other two, but reinforces them.

Other measures and criticism

The government has also considered other measures to tackle the unlawful use of self-employed professionals, such as a minimum rate to combat exploitation and more opportunities for self-employed persons to bargain collectively. TODO_VERIFY: whether and in what form these measures have been implemented changes — check current legislation.

The plans received considerable criticism, particularly from self-employed professionals who deliberately do not wish to work as employees. Many organizations representing the self-employed advocate for giving more weight to the free will of the parties.

How do you avoid being classified as a bogus self-employed person?

Whether an employment relationship is considered an employment contract depends on its actual execution — not just on paper. Nevertheless, a good agreement helps to substantiate independence:

• concretely establish the independence and the absence of authority;
• avoid the contractor being effectively treated as an employee;
• Pay attention to the degree of embedding in the case of long-term or structural deployment.

Frequently Asked Questions

What is bogus self-employment?

Bogus self-employment exists when someone formally works as a self-employed professional but actually possesses the characteristics of an employee (such as authority and integration). The relationship can then be classified as an employment relationship.

What does embedding mean for my freelancers?

The more strongly a freelancer is integrated into your organization (permanent role, years of commitment, working under your responsibility), the greater the chance that the relationship qualifies as an employment relationship.

Is a good self-employment contract sufficient?

A good contract helps, but is not decisive. The actual execution determines the classification. Ensure that paper and practice align.

What are the risks of bogus self-employment?

Upon reclassification as employment, additional tax assessments, social security contributions, and employment law obligations may arise. Therefore, have your situation assessed in a timely manner.

Hesitated about hiring freelancers?

The rules surrounding bogus self-employment and integration are complex and constantly evolving. We assess your situation and provide appropriate advice so that you are not faced with any surprises.

We also draft self-employment contracts or hiring agreements that help prevent classification as a bogus self-employed person. View our employment law or schedule a no-obligation intake consultation.