The Clarifying the Assessment of Employment Relationships and Legal Presumptions Bill (Vbar) is making its way through the House of Representatives. It might sound like another layer of legal jargon, but for small and micro-entrepreneurs, it can have real consequences for how you hire, collaborate, and even price your services.

What’s Changing

The bill seeks to reduce the gray area between employment and self-employment by refining the definition of “working in the service of”, the legal phrase at the heart of employment status disputes.

It introduces a two-step framework:

1. Work-related and organizational control
   • Is the person embedded in your organization?
   • Do you dictate how, when, and where the work is done?
   • Is there a clear relationship of authority?
   If no such control exists, the process stops here, there’s no employment contract.
2. Working for one’s own account and risk
   • Does the person bear financial risk?
   • Do they bring specialized knowledge you don’t have?
   • Are they operating independently in reality, not just on paper?
   Here, the law will weigh whether these factors outweigh the signs of authority. The actual performance of the work, not just the contract wording, is decisive.

The approach mirrors the Deliveroo judgment and will be supported with practical examples to help both entrepreneurs and contractors understand where they stand.

The Low-Hourly-Rate Presumption

A new legal presumption will also come into play:

If someone earns below €36 per hour (from 2025), they may automatically be presumed an employee, if they choose to invoke that right.

This shifts the burden of proof to the employer to show why it’s not an employment relationship. The goal is to protect vulnerable workers, but for micro-companies, it also means:

• More caution when hiring low-paid freelancers.
• Possible cost increases if roles must be converted to formal employment.

Why This Matters for Micro and Small Companies

For many small entrepreneurs, the flexibility of hiring freelancers and contractors is essential. The Vbar framework could:

• Limit flexibility if certain arrangements are deemed employment.
• Increase compliance risk, incorrect classification can lead to back payments for taxes, social security, and possible fines.
• Affect project costs, particularly if you rely on specialists for part-time or short-term work under €36/hour.

With the bill coming into force on 1 July 2026, and no transitional period, there’s no “grace time” to adapt once it becomes law.

Action Points Before 2026

1. Review existing contracts, especially for roles with low hourly rates or long-term embedded work.
2. Map roles against the two-step test, identify where “organizational control” could be argued.
3. Adjust your pricing and structure, consider raising hourly rates above the €36 threshold where realistic, or redesigning engagement terms.
4. Document independence, if you hire freelancers, keep clear records of their business autonomy, risks taken, and unique expertise.
5. Seek legal/HR guidance early, don’t wait until Q2 2026 to react.

Bottom line:

Vbar is not just another formality, it’s a shift in how the law will look at your working relationships. For small companies, preparation now means avoiding unpleasant surprises later. Treat the next year as your compliance alignment period.