Goodbye to Zero-Hour Contracts

The zero-hour contract is set to disappear, following a decision by the Dutch government. These contracts kept staffing costs low but required workers to be on standby without guaranteed hours. This system, which largely placed the burden on freelancers and employees, is now set to change.

A legislative proposal is in place to ban zero-hour contracts, making fixed contracts the new standard. Additionally, those working through employment agencies will soon receive more security with guaranteed contracts. But what does this mean for freelancers, employees, and employment agencies? We've gathered the latest information so you’ll know exactly what to expect.

This change is part of a broader trend to offer better protection for freelancers and flexible workers. For instance, the Balanced Labour Market Act (WAB) was introduced in 2020 to reduce the gap between the security of fixed contracts and the uncertainty of flexible ones. This law has already provided more stability for on-call and payroll workers, while encouraging employers to offer more permanent contracts.

What’s Changing?

Let’s focus on the upcoming change: the ban on zero-hour contracts starting in 2025.

Zero-hour contracts will be prohibited. Moreover, rules around temporary contracts will become stricter. For instance, employers will be allowed to offer a new temporary contract only after a five-year gap, compared to the current six months. This aims to prevent revolving-door hiring practices.

The main objective is to provide more security for both employees and freelancers.

Erik-Jan Klinkenberg, Finqle’s CEO, has said:

“This could be a positive development. It will create more certainty for freelancers and temporary workers, as well as their clients. We may see an increase in the number of freelancers and temporary workers, as the zero-hour contract will no longer be an option.”

Maximum Availability with Minimal Security

Klinkenberg highlights a major issue in today’s labor market: workers are expected to be fully available with minimal job security. Zero-hour contracts required them to be on-call whenever needed by businesses, without any guaranteed hours or income.

With the ban on zero-hour contracts, employers will now have to make a choice:

1. Hire the person as a freelancer

2. Offer them a permanent contract

3. Engage an employment agency

The zero-hour contract will no longer be a viable option.

What Does This Mean for Freelancers, Employees, and Employment Agencies?

The end of zero-hour contracts is good news for freelancers, employees, and employment agencies alike. It brings more security through social protection for all types of workers.

Here’s what this means for you:

Freelancers and the Self-Employed

With zero-hour contracts no longer allowed, many employers will turn to freelancers and self-employed professionals. This allows you to work on your own terms, instead of being tied to a contract that requires you to be available with no guaranteed work or hours.

Employees

If you're in permanent employment, you can expect a maximum of three temporary contracts before being offered a permanent one. Employers will only be allowed to offer another temporary contract after a five-year gap, rather than the current six months.

Employment Agencies

With the end of zero-hour contracts, temporary workers will become a more attractive option for businesses. This means that employment agencies will play a larger role in the labor market.

Feedback from Our Clients: Expecting Growth

At Finqle, we make invoicing and factoring simple for freelancers, SMEs, and businesses or platforms that connect freelancers, self-employed workers, and employees with employers. We asked some of our clients for their views on the changing legislation.

One client pointed to the WAB law:

“Criticism of zero-hour contracts has been around for a while, and the WAB law was introduced in response to it. But there were still loopholes. With the outright ban, those loopholes will close, and that’s a positive step.”

We also spoke with Gert van Faassen, founder of the TDC Group, which has been providing technical personnel for construction, engineering, and installation for 20 years. He shared:

“So far, we haven't seen any changes in registrations. In fact, I expect growth in 2023 and 2024, as there is an increasing need for technical personnel.”
He also highlighted the administrative burden for freelancers and employment agencies:
“The administrative load will shift to freelancers, self-employed workers, or employment agencies, as employers want to avoid dealing with it. This requires smart solutions to minimize time spent on administration.”

Smart Invoicing and Factoring with Finqle

At Finqle, we simplify administration for freelancers, self-employed workers, employment agencies, platforms, and employers. Our intelligent invoicing solutions and factoring services take the hassle out of financial management.

Our software makes invoicing easier and can even automate the process entirely, which is particularly useful for platforms that work with many freelancers, as well as for employers managing both freelancers and permanent staff. Additionally, we offer factoring services for freelancers and SMEs, ensuring faster payments and less time spent on managing invoices, debt collection, and related administration.

If you're looking to prepare for these changes and ensure smooth operations for your business, Finqle can provide the solutions you need.