Clarity or Minefield? The New Frontier for Small Business Owners

The Dutch government has introduced the Vbar bill to do what past policies could not: cut through the legal fog around employment status. This is not an academic exercise. If you run a micro or small company, the new rules will touch every contract you sign, every freelancer you pay, and every internal compliance control you neglect. For holding companies, the knock-on effects will ripple up and down your structure.

Here’s the change:

The bill amends Book 7 of the Dutch Civil Code, making explicit when a worker is “in service” (onder gezag) and, crucially, introducing a legal presumption of employment for those earning below €35.43 per hour. If you pay below this threshold, the law will assume you have an employee, not a contractor, unless you can prove otherwise.

Three Pillars: How to Recognize an Employment Relationship

Forget past ambiguities. The new law defines “work in service” by three interconnected elements:

• Work-Related Subordination: Is the worker taking instructions or direction from you?
• Organizational Embedding: Is the worker part of your structure, attending meetings, following your routines, integral to your business?
• Work at Own Risk: Does the worker bear real entrepreneurial risk, clients, investments, liability?

If the answer to the first two is yes, and the third is no, you have an employee, not a freelancer. If it’s less clear, the law asks: does the worker genuinely operate as an entrepreneur in the market? That final “C+” test cuts through self-serving constructions.

The €35.43 Threshold: Legal Presumption and Its Teeth

Here’s the critical detail:

Any work performed for another party for €35.43 per hour or less will automatically be presumed to be employment, unless it’s for a private individual, and only the employee can invoke this presumption. Enforcement agencies can’t use it to target companies, but the risk is real: if a contractor claims employment status, you’ll need to prove the contrary in court. This ties directly into payroll taxes and employee insurance obligations.

For holdings and complex structures: If you’re using group companies to shield or rotate freelance talent at sub-threshold rates, your internal controls must be watertight. The risk of a single adverse ruling will travel up the chain, exposing the holding to back taxes, social premiums, and reputation risk.

Implications for Micro and Small Enterprises:

A. Compliance is Not Optional

• Documentation: You must thoroughly document the rationale for each non-employment relationship. Template contracts are not enough; you need substance and audit trails.
• Risk of Reclassification: Any “contractor” who starts looking, acting, or being paid like an employee can claim that status retroactively. This is especially dangerous for growing companies, or those who work with “quasi-freelancers” as a flexible layer.

B. Operational Flexibility Narrows

• The more you embed freelancers in your daily business (team meetings, core processes), the greater your exposure.
• For founders who grew up with the Dutch “ZZP” culture, understand: this bill is designed to push pseudo-freelancers back into employment contracts. The age of “hybrid” status is ending.

C. Communication and Culture

• Internal Communication: Your team leads must understand the new rules. “It’s just a contractor” will no longer suffice as an argument.
• External Messaging: Clients and suppliers must also adapt. The government and tax authorities will be running public campaigns, but ultimately, the legal and reputational risk sits with you as an entrepreneur.

Implications for Holdings and Group Structures

• Centralized Controls: Holdings must standardize assessment criteria across subsidiaries. If each company applies a different standard, group risk skyrockets.
• Audit & Oversight: Expect regulators to look at group-wide practices, not just at the operating entity level.
• Strategic Talent Planning: Reliance on cheap freelance labor is no longer a viable structural advantage. Rethink how you acquire, develop, and retain talent within the boundaries of the new legal framework.

What Should CEOs and Owners Do Now?

• Immediate Legal Review: Audit every current freelance, interim, or flexible contract—especially those below the €35.43 threshold.
• Update Internal Policy: Refresh HR, payroll, and procurement policies to reflect the new definitions.
• Scenario Planning: Model the impact of forced reclassification on your cost base, tax position, and social insurance contributions.
• Board-Level Awareness: This is not a back-office issue. The risk is strategic, and the exposure is existential for micro and small enterprises.

From Uncertainty to Intentional Structure

The Dutch government has closed the door on ambiguity. For entrepreneurs, this is less about limiting freedom and more about requiring intentional choices. Either build your business with genuine employees, or work only with true entrepreneurs, those who carry risk, own their market position, and are visibly outside your core. Anything in between is a liability waiting to mature.

The new law rewards those who take structure seriously and exposes those who rely on informal shortcuts.