Our labour market is becoming increasingly flexible, something entrepreneurs are noticing every day. To handle peaks in workload or to access specific expertise, many companies turn to freelancers or self-employed professionals. It makes sense because this approach offers agility, speed and sometimes tax advantages. Still, it pays to be careful because these collaborations also carry risks, especially from a legal perspective. We are happy to share some clear insights so you can collaborate with confidence and the right knowledge.
False self-employment: what if the collaboration is reclassified?
The biggest risk in freelance and self-employed assignments is that the collaboration is later reclassified as an actual employment contract. This amounts to false self-employment and the consequences for you as a client can be severe...
Outstanding social security contributions (both employer and employee share)
Back payments for withholding tax
Fines and late payment interest
Possible wage claims: unpaid salary, holiday pay, year-end bonus...
Whether there is false self-employment is assessed using a few key criteria: does the freelancer have the freedom to organise their work? Can they decide their own working hours? Is there supervisory control? The more freedom, the lower the risk.
Consequences for the freelancer
While most of the risks lie with the client, freelancers are not immune:
They may need to re-register with a social security fund
Reimbursement of contributions will only happen after a court ruling
Potential loss of tax advantages for the self-employed
Uncertainty about social rights during the reclassification period
In short, false self-employment creates uncertainty for both parties and that is exactly what you, as an entrepreneur, want to avoid.
A costly real-life example
An IT company worked with several freelance developers. During a social security inspection, these assignments were reclassified as employment relationships. Why?
The freelancers were required to work on-site
They carried out the same tasks as employees
They had to report and justify their absences
The result? More than €150,000 in social security contributions and fines.
Dos and don’ts when working with freelancers
Looking to avoid problems? Keep these key points in mind:
DOS
Ensure you have a clear, professional service agreement. Key elements include:
Preamble
State clearly that it concerns a self-employed collaboration and that both parties explicitly agree.
Exoneration clauses
Limit your liability, in line with B2B legislation.
Termination clauses
Provide reasonable notice periods and compensation terms.
Confidentiality
Apply confidentiality not just to the company but also to the individual behind the freelancer.
Work organisation
Allow the freelancer enough freedom in terms of place, timing and method of work.
DON’TS
Avoid anything resembling a traditional employer-employee relationship:
Applying the same policies for employees and freelancers (e.g. laptop, phone, car)
Holding assessment interviews like with permanent staff
Requiring holiday approval
Requesting sick notes
Adding freelancers to the staff list
Using terms such as ‘holiday pay’ or ‘year-end bonus’
In summary: be smart, not reckless
Working with freelancers can be a great asset to your business but only if handled correctly. Our PIA offices and advisory experts are here to guide you on a legal, fiscal and strategic level.
Have questions about your contracts or need a risk analysis? Our accountants and advisors will help you with clear agreements, tax optimisation and practical tips.
