The European Union is preparing to introduce significant changes to employment laws across EU countries, including self-employment regulations, which will impact the labor market, particularly technical professionals like welders. The new rules, outlined in an EU directive, aim to increase legal protection for gig workers and those operating under sole proprietorships. The directive is expected to be implemented at the beginning of 2024 (source: BDO).

Implementation Plan for Individual Countries

Each member state will be required to integrate the new regulations into its legal system within two years of the directive’s adoption at the EU level. For example, the Netherlands is already implementing changes, such as the VBAR Act (Verduidelijking beoordeling arbeidsrelaties en rechtsvermoeden), which aims to clarify when a contractor should be classified as an employee. These changes are being made in response to the growing number of false self-employment cases, where individuals formally working as freelancers are, in practice, treated as employees without proper benefits and protections.

For instance, if a worker earns less than a specified hourly rate (about €33), they will be presumed to be an employee unless the employer proves otherwise. This measure is intended to ensure fair treatment for workers with weaker bargaining positions. Additionally, starting in 2025, the Dutch tax authority will begin enforcing these regulations, increasing company responsibility for correctly classifying their employees and contractors ​(L&E Global)​(Crowe Peak).

Dutch regulations are also stringent regarding the use of model contracts for self-employed workers, ensuring that the relationship between contractors and clients is properly documented and that contractors are not effectively treated as employees without the appropriate rights. These measures aim to reduce legal ambiguity and provide greater protection for both freelancers and companies using their services ​(business.gov.nl).

Impact on Technical Professions

The new regulations could significantly affect technical professions, including welders. Changing status from self-employed to employee would bring greater social and labor rights but also higher tax burdens and administrative costs for both workers and employers. Companies will have to adjust their operational models, which may impact cost structures and operational efficiency.

Criteria for Freelancers

After the new regulations are introduced, freelancers will need to meet certain criteria to avoid issues during inspections. In the Netherlands, for example, it is expected that a freelancer earning less than €33 per hour will be automatically classified as an employee unless the employer declares otherwise (source: Freelance Informer).

For a welder operating as a sole proprietor (JDG) to continue their business and avoid issues under the new EU regulations, several strategies should be considered:

1. Clearly Document Independence:

Welders should ensure that documentation related to their work clearly indicates their independence from clients. This includes contracts specifying working conditions, such as no fixed working hours, freedom to choose job locations, and the ability to work for multiple clients.

2. Setting Rates and Conditions:

A welder should have control over setting their own rates and negotiating contract terms, demonstrating independent business operations.

3. Owning and Maintaining Equipment:

Owning and maintaining personal equipment used for work can also serve as evidence of independence.

4. Diversifying Clients:

Working for various clients, rather than having a long-term relationship with a single client, can help prove that a welder is genuinely running their own business.

5. Registering the Business:

Welders should ensure their business is registered as a sole proprietorship in accordance with local regulations, including any licensing and permit requirements.

6. Consulting a Legal or Accounting Professional:

It is also advisable to consult a professional for guidance on local laws and advice on how to best adjust their business to meet the new legal requirements.

Following these steps can help welders avoid being classified as employees, which is crucial given the new regulations aimed at combating false self-employment.

Summary of Changes

Pros:

• Increased legal protection for freelancers and gig workers.
• Greater legal clarity and security for both workers and employers.
• Strengthened rights for collective bargaining among self-employed individuals.

Cons:

• Potentially higher costs for businesses, which could affect service pricing.
• Possible complications in transitioning from self-employment models to employee-based structures.
• Reduced flexibility in managing non-employee work arrangements.

The new regulations introduce significant shifts in labor market dynamics across the European Union, posing new challenges and opportunities for both workers and employers. Businesses and the self-employed will need to adapt to the new reality, which could revolutionize the European labor market.

Looking for employment opportunities in the Netherlands? Check out our article on important formalities! Dutch BSN Number: Essential Guide for Expats and Workers