FreelanXAt a glance
The label is not the answer.
In the EU, the Platform Work Directive (EU) 2024/2831 creates a rebuttable presumption of employment for people working through digital platforms when facts show control and direction. Member States must transpose it by 2 December 2026.26
Self-check
The 10 signs. Tick what applies.
Each sign is one of the indicators listed by the International Labour Organization in Recommendation No. 198. Tick the ones that describe the relationship as it really works: the count and the level update as you go.1
Signs that apply
/ 10
Tick the signs that describe how the person really works, not what the contract says.
Few signs
A contractor set-up can fit. Keep the contract and the day-to-day work in line, and look again if the mission grows.
Mixed signs
Review the set-up: change how the work is organised, or let FreelanX Contractors+ carry the engagement.
Strong signs of employment
In most countries this looks like a job. Employ the person, for example through FreelanX EOR.
The FreelanX option that fits
Self-service · Marketplace · AI matchingFreelanX Talent5%Post a mission Contractor ManagementFreelanX Contractors$19See FreelanX Contractors Contractor of recordFreelanX Contractors+$279Talk to us Employer of Record · Payroll · Local complianceFreelanX EOR$499Start a request
Indicative, not legal advice. Each country weighs the signs differently.
8 countries
Eight countries, eight tests.
Each country has its own test, its own enforcer and its own price for a wrong label. Pick a country: the test, what is checked, the costs and a real case, with the sources and their dates. General information, checked October 2026.
US
United States
IRS common-law test · California ABC test
Federal tax: the IRS weighs behavioral control, financial control and the relationship of the parties. California presumes employment unless the hiring entity meets all three parts of the ABC test.
A · Free from controlB · Outside your usual businessC · Own independent trade
California: all three must be met
What is checked
- Behavioral control: the right to direct what work is done and how
- Financial control: who directs the business side of the job
- Relationship: contracts, employee-type benefits, permanency, a key part of your regular business
Case in point
Dynamex (California Supreme Court, 2018) adopted the ABC test; AB 5 wrote it into the Labor Code (sections 2775 and following).
Who enforces
The IRS decides status on request (Form SS-8); its Voluntary Classification Settlement Program lets a business reclassify workers with partial relief. For federal wage law, the Department of Labor proposed a new independent contractor rule on 26 February 2026.
What it can cost
$5,000 – $15,000
per violation for wilful misclassification in California
$10,000 – $25,000
per violation when it is a pattern or practice
Sources: IRS, reviewed 13 October 2026 · California Labor & Workforce Development Agency, consulted October 2026 · California Labor Code (public.law), consulted October 2026 · DLA Piper, 2 March 2026
GB
United Kingdom
Control, personal service and the other terms · IR35
A contract of employment needs a right of control, personal service, and other terms consistent with employment (Ready Mixed Concrete, 1968). For tax, the off-payroll working rules (IR35) apply to contractors working through their own company.
Right of controlPersonal serviceOther terms fit
Three conditions, read together
What is checked
- Can the client control what, how, when and where?
- Must the person do the work, or can they send a substitute?
- Do the other terms look like employment?
Case in point
Uber v Aslam (UK Supreme Court, 19 February 2021): drivers are workers, entitled to the minimum wage and paid annual leave; the written agreement is not the starting point.
Who enforces
Since 6 April 2021, public authorities and medium and large private-sector clients decide the status themselves, and the fee-payer deducts tax and National Insurance. HMRC’s CEST tool gives HMRC’s view and HMRC stands by its result while the information given stays accurate.
What it can cost
Tax + NICs
deducted by the fee-payer, plus employer NICs and Apprenticeship Levy
Supply chain
liability can pass along the labour supply chain
Sources: HMRC Employment Status Manual, consulted October 2026 · HMRC, GOV.UK, consulted October 2026 · HMRC, GOV.UK, updated 30 April 2025 · UK Supreme Court, 19 February 2021
FR
France
Lien de subordination
Work under the authority of an employer who can give orders and directives, check that they are carried out and sanction failures (Cour de cassation, Société Générale, 13 November 1996). Registered self-employed people are presumed not to be employees, a presumption that falls when there is permanent legal subordination.
Orders and directivesControl of executionPower to sanction
Three powers make an employer
What is checked
- Who sets the instructions and the way the work is done
- Who checks the work and can sanction it
- Whether the person can build their own clientele and set their prices
Case in point
Uber (Cour de cassation, 4 March 2020): a driver who could not build his own clientele or freely set his fares, and could be disconnected by the platform, was an employee.
Who enforces
Courts can requalify the contract as employment. Undeclared employment is concealed work (travail dissimulé), a criminal offence.
What it can cost
3 years + €45,000
imprisonment and fine for concealed work (Code du travail L8224-1)
Sources: Cour de cassation (copy on droit-technologie.org), 4 March 2020 · Ministère du Travail, code.travail.gouv.fr, consulted October 2026
DE
Germany
Scheinselbstständigkeit (bogus self-employment)
Employment is non-independent work; its signs are working under instructions and integration into the client’s organisation (§ 7 SGB IV). The overall picture counts, and what happens in practice weighs more than the contract.
InstructionsIntegrationEntrepreneurial risk
Weighed as a whole
What is checked
- Instructions on content, time and place of work
- Integration into the client’s organisation, tools and reporting duties
- Own business risk, own premises, free organisation of time
Case in point
Herrenberg (Federal Social Court, 28 June 2022, B 12 R 3/20 R): a music-school teacher agreed as self-employed was employed: set rooms, integrated in the school, little room for entrepreneurial decisions.
Who enforces
Deutsche Rentenversicherung decides on request in a status determination procedure (§ 7a SGB IV), binding for one contract; the client, the contractor or both can apply.
What it can cost
4 years
of back social contributions, employer and employee shares
30 years
when contributions were withheld on purpose
1% a month
late-payment surcharge
Sources: IHK München, 2025 · Deutsche Rentenversicherung, consulted October 2026
ES
Spain
Dependencia y ajenidad · falso autónomo
The Workers’ Statute applies to paid work done for another, within the organisation and direction of an employer (article 1.1). A “falso autónomo” is a self-employed contract that hides this. For delivery through digital platforms, the 2021 Rider law presumes employment when the platform manages the work through an algorithm.
Paid workFor another (ajenidad)Under direction (dependencia)
All three make employment
What is checked
- Who organises and directs the work
- Who owns the essential means and faces the customer
- Algorithmic management of the service (platforms)
Case in point
Glovo (Social Court no. 3 of Córdoba, 19 May 2022): 222 riders declared employees, following the Supreme Court ruling of 25 September 2020.
Who enforces
The Labour and Social Security Inspectorate and the courts; the Social Security ministry itself can bring a claim.
What it can cost
€3,750 – €12,000
per worker not registered with Social Security (serious infraction, LISOS)
Sources: Iberley, consulted October 2026 · Iberley, consulted October 2026 · El Derecho, 29 September 2021 · Consejo General del Poder Judicial, 30 May 2022
NL
Netherlands
Authority, pay, personal work · the Deliveroo ruling
Since the Deliveroo ruling (Hoge Raad, 24 March 2023), all circumstances count, with no ranking: the nature and duration of the work, who sets the work and the hours, embedding in the organisation, personal work, how pay is set, commercial risk and whether the person acts as an entrepreneur.
AuthorityPayPersonal work
All circumstances, no ranking
What is checked
- Embedding in your organisation and processes
- Who sets the work and the hours
- Commercial risk and entrepreneurial behaviour: clients, reputation, how long each engagement lasts
Case in point
Deliveroo (Hoge Raad, 24 March 2023): the couriers had employment contracts; entrepreneurship is one circumstance among others.
Who enforces
The Belastingdienst resumed full enforcement on 1 January 2025: 842 company visits and 237 book investigations by the end of October 2025. 2025 was a “soft landing” without fines; from 1 January 2026, fines can be imposed again. Until 2030, it in principle looks back no further than 1 January 2025.
What it can cost
From 2026
penalty fines again, after the 2025 soft landing
€100,000
tax loss above which intent can lead to criminal prosecution
Sources: Grant Thornton Netherlands, 4 April 2023 · Accountancy van Morgen, 11 December 2025 · Dirkzwager, 19 December 2025
CA
Canada
In business on their own account?
The central question is whether the person performs the services as a person in business on their own account (Supreme Court, Sagaz, 2001). The CRA asks what the parties intended, then checks that the working conditions match. Quebec applies the Civil Code test, with subordination.
IntentFactsOwn account?
Intent first, then the facts
What is checked
- Control over how and what work is done
- Tools and equipment; subcontracting or hiring assistants
- Financial risk, investment and management, opportunity for profit
Case in point
Sagaz (Supreme Court of Canada, 2001): the sales agency was a contractor: its own office, its own costs, free to take other work, and it bore the risk of loss or profit.
Who enforces
The CRA issues CPP/EI rulings at the request of the payer or the worker (deadline: 29 June of the year after the work). A ruling decides whether CPP contributions and EI premiums apply.
What it can cost
CPP + EI
contributions and premiums when the work is employment
Sources: Canada Revenue Agency, modified 6 January 2026 · Canada Revenue Agency, modified 6 October 2023 · Emond Harnden, January 2002
AU
Australia
The whole relationship · sham contracting
Since 26 August 2024, the Fair Work Act looks at the real substance, practical reality and true nature of the working relationship, not only the written contract. Contractors earning above the high income threshold ($183,100 from 1 July 2025) can opt out.
Real substancePractical realityTrue nature
The whole relationship, not the label
What is checked
- How the work is really done, not only what the contract says
- All parts of the working relationship
- Since 27 February 2024, an employer must show it reasonably believed the person was a contractor
Case in point
Fair Work Ombudsman, March 2026: nearly $200,000 in penalties against a Sydney company that ended or threatened to end three workers’ employment to re-engage them as contractors for substantially the same work.
Who enforces
The Fair Work Ombudsman investigates and takes cases to court.
What it can cost
$19,800
maximum per contravention for an individual
$99,000
for a business with fewer than 15 employees
$495,000
or three times the underpayment, for 15 employees or more
Sources: Fair Work Ombudsman, updated 26 August 2024 · Fair Work Ombudsman, March 2026
What it can cost
A wrong label gets expensive.
The highest figures of the eight countries above, per violation, per worker or per contravention. The details are in each country panel.
Four kinds of cost
Taxes and contributions
Income tax, social security and payroll contributions that should have been paid, often for several years.
Interest and surcharges
Late-payment interest and surcharges on top of the amounts owed.
Fines and penalties
Administrative fines, and in some countries criminal penalties.
Employee rights
Minimum wage, paid leave and the other rights of an employee, owed back to the person.
With FreelanX
Stay on the right side.
Match the set-up to the signs. Four ways to work with someone abroad, from a mission to employment.
Self-service · Marketplace · AI matching
FreelanX Talent
A defined piece of work with deliverables and milestones, done by a freelancer you choose.
5%per payment on each side
Contractor Management
FreelanX Contractors
Independent contractors you engage directly, when few signs apply. Local contract templates, payments on approval. The classification risk stays with you.
$19per contractor / month
Contractor of record
FreelanX Contractors+
Several signs apply but the person stays independent: FreelanX EOR engages the contractor and carries the compliance.
$279per contractor / month
Employer of Record · Payroll · Local compliance
FreelanX EOR
The role is really a job: FreelanX EOR employs the person on a local contract, with payroll, taxes and benefits. From 2 days, up to 30 depending on the country.
$499per employee / month billed yearly · $549 monthly
One person, one country
The Misclassification check weighs the signals the way that country’s main test does, then shows a risk level and why.
In practice
Five habits that keep a contractor a contractor.
1
Buy a result, not time
Deliverables and milestones in the contract, with a price per milestone.
2
Let them organise the work
They choose how, when and where, within the deadlines you agree.
3
Keep them out of the org chart
No company title, no staff to manage, no internal rituals they must attend.
4
Pay against invoices
Pay for delivered work, not a monthly salary.
5
Review when it lasts
When a mission is extended again and again, check the set-up, or move to employment.
FAQ · Misclassification
Questions people ask first.
Does a contract that says “independent contractor” protect me?
No. Courts and tax authorities look at how the work is really done. In 2021 the UK Supreme Court said the written agreement is not the starting point (Uber v Aslam).
Is working for one client enough to make someone an employee?
Rarely on its own. Most tests weigh several signs together. One client, combined with fixed hours, your tools and pay by the month, is a different picture.
What changes with FreelanX Contractors+?
FreelanX EOR engages the contractor as contractor of record and carries the compliance, for $279 per contractor per month. The person stays independent.
Can I move a contractor to employment?
Yes. FreelanX EOR can employ them in their country, from $499 per employee per month billed yearly.
Keep exploring
Related pages.
Sources
Checked, dated, sourced.
- 1Employment Relationship Recommendation, 2006 (No. 198), paragraph 13 · International Labour Organization, ILO Helpdesk · page consulted October 2026
- 2Topic no. 762, Independent contractor vs. employee · IRS · reviewed 13 October 2026
- 3Frequently Asked Questions on AB 5 (ABC test) · California Labor & Workforce Development Agency · consulted October 2026
- 4California Labor Code section 226.8 · California Labor Code (public.law) · consulted October 2026
- 5DOL proposes independent contractor rule · DLA Piper · 2 March 2026
- 6ESM7030, Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance · HMRC Employment Status Manual · consulted October 2026
- 7Off-payroll working rules from April 2021 · HMRC, GOV.UK · consulted October 2026
- 8Check employment status for tax · HMRC, GOV.UK · updated 30 April 2025
- 9Uber BV and others v Aslam and others [2021] UKSC 5, press summary · UK Supreme Court · 19 February 2021
- 10Notice explicative, arrêt n°374 du 4 mars 2020 (Uber) · Cour de cassation (copy on droit-technologie.org) · 4 March 2020
- 11Code du travail, article L8224-1 · Ministère du Travail, code.travail.gouv.fr · consulted October 2026
- 12Merkblatt Scheinselbstständigkeit 2025 · IHK München · 2025
- 13Herrenberg-Urteil: was ist das? · Deutsche Rentenversicherung · consulted October 2026
- 14Estatuto de los Trabajadores, artículo 1 · Iberley · consulted October 2026
- 15Cuantía de las sanciones económicas en el orden social (LISOS, amounts from 1 October 2021) · Iberley · consulted October 2026
- 16Ley 12/2021, de 28 de septiembre (Rider law) · El Derecho · 29 September 2021
- 17Un Juzgado de Córdoba declara la relación laboral entre Glovo y 222 repartidores · Consejo General del Poder Judicial · 30 May 2022
- 18Hoge Raad in Deliveroo-arrest: bezorgers hebben een arbeidsovereenkomst · Grant Thornton Netherlands · 4 April 2023
- 19Fiscus stond in 2025 bijna duizend keer op de stoep om schijnzelfstandigheid · Accountancy van Morgen · 11 December 2025
- 20Nieuw Handhavingsplan arbeidsrelaties 2026 · Dirkzwager · 19 December 2025
- 21Employment status: Employee or self-employed · Canada Revenue Agency · modified 6 January 2026
- 22RC4110, Employee or Self-employed? · Canada Revenue Agency · modified 6 October 2023
- 23671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59 (summary) · Emond Harnden · January 2002
- 24Independent contractor changes (Closing Loopholes) · Fair Work Ombudsman · updated 26 August 2024
- 25Sham contracting in the spotlight (media release) · Fair Work Ombudsman · March 2026
- 26EU Platform Work Directive: which countries have implemented · Ius Laboris · 28 September 2026
General information, checked October 2026. Not legal advice: rules change and every case depends on its facts. For a decision, talk to us or to your counsel.