What are the challenges for independent contractor?
Independent contractors (IC’s) distinguish themselves with specific knowledge and skills and want to do what they are good at. Just like their clients, they are aware of the risks in the area of tax and employment law and want to have the formal aspects of entrepreneurship well organised. IC’s want to present themselves to their (potential) clients as a professional and reliable party.
Legislation and regulations and making good agreements
IC’s and the client have to deal with a maze of regulations, which creates uncertainty and can have unpleasant consequences. Agreements they make and the way in which they work can be tested by the tax authorities and by the labor court. For example, the Tax and Customs Administration can classify a self-employed person as a self-employed person for the purposes of payroll taxes and not consider the same self-employed person as an entrepreneur for the purposes of income tax. There are also always risks for the client on (wage) claims under employment law.
IC’s often gains access to personal data and trade secrets when he carries out an assignment. Agreements such as a non-disclosure agreement and or other measures to protect trade secrets are usually lacking.
It is often a conscious choice to offer services to clients in an IC construction; it offers the IC more flexibility than an employment relationship and the IC can make use of tax benefits. Flexibility and the ability to deploy capacities without obligation are reasons for the client to opt for the use of IC’s, sometimes it is a client’s wish to award an assignment to a IC. The client also wishes to obtain the best price/performance ratio on the market, limit liability and cost risks and keep them manageable and reduce operational costs.
Together with IC’s, we work on a suitable legal operation for IC’s. The collaboration consists of:
- Developing and managing the IC contract portfolio with contracts, documents and scenarios;
- Sharing knowledge using webinars, awareness and training programs for the IC market; and
- Making suggestions for additional functionalities.
We work together with the MYOBI Trust Network to organise legal operations for IC’s. In this collaboration, a legal operation IC has been developed and this consists of:
- An information ecosystem on the MYOBI Trust Network;
- A company-specific learning environment with an awareness and training program for IC’s;
- Smart contracting with the contract portfolio IC and associated documents and scenarios;
- Supporting services such as knowledge bases and a service desk;
- ‘Legal support on demand’;
- The IC project; and
- An attractive price and quality ratio. The license costs for the trust network have been made as low as possible for freelancers.
With a small investment of time, the self-employed person can properly arrange the formal-legal part of his company and do what he is good at and for which he is also hired. And if there is ever a “hassle”, he can always appeal to legal support (“add legal support”).