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ACM: independent contractors are allowed to make arrangements about a minimum income

23-07-2019

Independent contractors are allowed to make collective arrangements about rates in order to earn a minimum income. This has been laid down in the draft version of the ‘Guidelines regarding price-fixing among independent contractors’. These guidelines tie in with the initiatives of the Dutch Ministry of Social Affairs and Employment to improve the positions of low-skilled independent contractors.

Martijn Snoep, Chairman of the Board of ACM, explains: “We want to make markets work well for people and businesses. Markets cannot work well if independent contractors earn less than the living wage as a result of low hourly rates. These guidelines reveal what options independent contractors have to improve their financial positions.”

Independent contractors sometimes want to make collective arrangements regarding higher rates. This is usually not allowed, because price-fixing agreements made by businesses often distort competition, which leads to higher prices for consumers. These guidelines show what room independent contractors have for making arrangements that are in accordance with the Dutch Competition Act. Examples include:

  • If they work “side by side” with employees. As a result thereof, they are not considered undertakings within the meaning of the Dutch Competition Act.
  • If they make arrangements among themselves today in order to charge the statutory minimum rate, announced by the government, already in the period prior to its commencement date.
  • If they jointly agree with their clients that a higher minimum rate is needed for earning a living wage. 

The Dutch Competition Act does not apply to independent contractors who work side by side with employees

Independent contractors who work side by side with one or more employees, and who, in day-to-day operations, are indistinguishable from those employees are, for that particular job, not considered ‘undertakings’ within the meaning of the Dutch Competition Act. In that case, the cartel prohibition will not apply to that independent contractor. They are allowed to make collective arrangements about rates for that particular job. This is also allowed as part of collective bargaining agreements. 

Independent contractors are already allowed to realize the announced statutory minimum rate today

The Dutch government recently announced it seeks to introduce a statutory minimum rate of 16 euros for independent contractors from 2021. With this minimum rate, the government wishes to protect independent contractors from poverty, and prevent them from being hired at too low a rate. It will also prevent clients from only hiring independent contractors because of lower costs, which leads to social dumping. As the government has already announced these plans, ACM will not impose any fines in the period prior to the commencement date of the minimum rate for arrangements made among independent contractors who already wish to charge that minimum rate.

Would you like to respond? You have until September 9 to do so. Please read the consultation document for more information.

See also

23-07-2019 ACM opens public consultation on opportunities for independent contractors to make arrangements about a minimum income (in Dutch).