False Self-Employment: A growing risk for employers
In the Netherlands, courts are increasingly ruling in favor of freelancers (zzp’ers) who claim they were actually employees. In 24 out of 47 recent cases, judges concluded that the freelancer was misclassified and entitled to employee rights. For employers, the financial consequences can be significant, with retroactive payments reaching tens of thousands of euros per individual.
What’s the risk?
If a freelancer is legally reclassified as an employee, they may be entitled to:
- Paid vacation
- Salary in line with collective labor agreements (CAO)
- Travel expense reimbursements
- Severance pay
- Sick leave
- Pension contributions
The costs can be substantial. A recent case involved Dutch handball club Limburg Lions, which had to pay €50,000 to a former player after the court ruled he had been an employee. The club subsequently went bankrupt. In another case, a barber working under a freelance arrangement successfully claimed €30,000 in back payments from a salon in Amsterdam. (Source: NOS)
Why the number of cases is increasing
Since January 2025, the Dutch Tax Authority has stepped up its efforts to assess whether freelancers are genuinely self-employed. Although the authority is not yet issuing fines or retroactively recovering funds, labor law experts warn that the real risk lies with the freelancer, who may file a claim years later.
A major turning point was a 2023 Supreme Court ruling that classified Deliveroo couriers as false self-employed workers. This landmark decision created clear legal precedent, making it easier for courts to determine whether a working relationship should be considered employment.
Pension impact: an invisible threat
Beyond direct financial consequences, false self-employment also affects pension systems. In the Netherlands, the principle “no contribution, still entitled” applies, meaning falsely classified freelancers can retroactively claim pension rights even if no contributions were ever made.
Employers can be required to pay up to five years of backdated pension contributions. For earlier years, the shortfall is absorbed by pension funds, which according to the Dutch Pension Federation has already resulted in a €1.3 billion gap, to be covered by workers who did contribute.
What can employers do?
If your company works with freelancers, whether during international expansion or to maintain operational flexibility, it’s essential to ensure the legal structure of those collaborations is sound. Key factors that may indicate employment include authority, obligation to perform work personally, fixed working hours, and integration into the organization.
Avoid unnecessary risks with Parakar
At Parakar, we help companies engage talent compliantly, whether they are employees or freelancers. Our experts ensure contracts and working relationships meet legal requirements in every country we operate in.
Get in touch if you’re unsure about your current freelance arrangements. Our experts are happy to advise!
