The European Commission has warned the Dutch government to address bogus self-employment and said that it needs to reduce the incentives given to both employers and employees to work via temporary and self-employment contracts.

The commission made the recommendations as part of its annual country report on the Dutch economy.

“The self-employed are not obliged to be insured against labour-related risks such as accidents at work, unemployment and old age, which could affect the sustainability of the social security system in the long run,” the report stated. “The new government announced several measures potentially addressing segmentation, but the specifics, timeframe and possible impact remain unclear.”

The report points out that government measures to tackle bogus self-employment have been suspended until 2020.

According to the commission, the Dutch government should tackle remaining barriers to hiring staff on permanent contracts and address the ‘high increase’ in self-employment. The report said that this should be done by reducing ‘tax distortions’ favouring self-employment, without compromising entrepreneurship, and by promoting access of the self-employed to affordable social protection.

The report highlighted that the increase in the number of employed persons in the Netherlands is mainly due to an increase in temporary and self-employment.