1 in 3 self-employed SIDN panellists expect adverse effects from clampdown on sham self-employment
Most meet the criteria themselves, but have customers who don't
On 1 January, the Dutch Tax Service began a push to enforce the Employment Relationships Deregulation Act (DBA). Put simply, the authorities will be checking that self-employed people are genuinely independent service providers, and not employees in all but name. News that the crackdown was planned caused considerable disquiet amongst self-employed people towards the end of last year. They were worried that the threat of penalties would make organisations wary of giving work to self-employed people. The new law making occupational disability insurance compulsory was also seen as a disincentive to starting a business.
Impact on the .nl domain
The enforcement push could have significant implications for the .nl domain as well, because start-ups and self-employed people account for a lot of the demand for websites and domain names. Every year, more than 200,000 start-ups register at least one domain name. Research looking at various sectors of the economy, including the care sector, has found that many self-employed people will take up direct employment in response to the enforcement drive. What's more, our own data shows that a lot of small businesses and sole traders cancelled their domain names in the latter part of 2024.
Most self-employed SIDN panellists work in ICT
Against that background, we decided to ask SIDN Panel members how DBA enforcement would affect them, and what implications might be for their online activities. The SIDN Panel includes 546 .nl domain name registrants. Of those, 88 say that they're self-employed, with about two thirds (60) of those working in ICT. Our respondent group is therefore biased, albeit predictably so, given that ICT professionals are more likely to visit our website than other people are. The findings consequently tell us mainly about the ICT sector.
Sham self-employment is uncommon in ICT
Most of our respondents (66 per cent) don't expect the clampdown to have any effect on them. The main reason being that self-employed people working in ICT usually meet the main requirement: having numerous different clients. Many webshops are managed by self-employed people as well, and a webshop naturally has a lot of different customers. Some of the things our respondents said:
"DBA enforcement won't affect me, because I have lots of different customers. There's nothing sham about my self-employment."
"As a webshop proprietor, I have thousands of customers, so enforcement of the DBA isn't going to bother me."
1 in 3 respondents feeling the impact
Nevertheless, the clampdown does have implications for some of our Panel members. Of our self-employed respondents, 1 in 3 are feeling an effect. In most cases, that takes the form of work being cancelled or postponed, or less work being commissioned. Another problem mentioned by various respondents is clients changing the conditions of contracts mid-term. Notably, the effects often appear to be indirect. In other words, our respondents meet the criteria themselves, but have customers who don't:
"A lot of my customers are self-employed. If some of them move into direct employment, for example, I'll have fewer customers. My own personal status isn't in doubt: I meet all the criteria to be classed as self-employed."
"Fewer self-employed people who can do jobs for you, because of people packing in self-employment. That'll make growth more challenging, since taking on direct employees is a big risk for a small business."
Impact on online activities uncertain
Although respondents who foresee an impact mostly expect it to be negative, our Panel members don't generally envisage their own online activities being affected. Indeed, just as many anticipate doing more online because of the clampdown as expect their investment in online activities to decline. One respondent who expects more work told us:
"I hope that self-employed people who don't yet have websites will decide that they need one in order to win additional customers."
What does DBA enforcement mean for you?
Want to know what DBA enforcement means for you as a self-employed person or someone who hires self-employed people? Visit these (Dutch) websites:
Join the SIDN Panel!
As the organisation behind the .nl domain, we like to hear what internet users, registrants and the (Dutch) business community thinks about the internet and its use, and about topics such as security, privacy and domain names. Would you be interested in sharing your views with us, maybe anonymously? Join the SIDN Panel!
