OPINION! Dr. Benno Grunewald: Bogus self-employment, bureaucracy & the dangers of determining one's status

Some freelancers are not freelancers but workers and fictitious self-employed - at least for social security. Explained in an interview Dr. Benno Grunwald, what you can do against this classification and why an application for a status determination is not a good one Idea at a hunt.

Dr. Benno Grunewald is a lawyer, specialist lawyer for tax law, mediator (DAA). He has in different cases successfully Represent freelancers who were classified as bogus self-employed by the German Pension Insurance Association. Members of the professional association for self-employed in IT (BVSI) e. V. can be contacted by phone for clear legal information Dr. Benno Grunewald contact.

Mr. Dr. Grunewald, years ago I was asked by a publisher to submit a status application to the German Pension Insurance Association (DRB). However, a short time later I became a member of the artists' social insurance and the topic was finished. But: Would such an application have been a good idea?

mine Opinions after rather not: Companies mistakenly hope for a “clean bill” from status determination applications. But in 99 percent of the cases they won't get it. In almost all cases in which a status determination application is submitted, the DRB assumes a bogus self-employment relationship. There is hardly a good argument left for a status determination procedure.

So better not wake a sleeping dog?

I consider the voluntary initiation of a status determination procedure to be fundamentally wrong. The only positive aspect of gaining certainty about the employee relationship is offset by a large number of possible negative consequences: the procedure is often very long. In some of the proceedings I have conducted, the employee relationships have long since ended without a decision of the German Pension Insurance Association (DRB). If it comes to proceedings before the social court, it takes even longer. In one case there were 4 years between the application and the decision of the social court!

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How can companies and self-employed persons avoid the status of self-employment?

It is important to check the contracts carefully and update them if necessary. So there are always contracts in which the Federal Insurance Agency for Employees (BfA) Rede is, which has not existed for a long time. Furthermore, the contract should state that the freelancer is not involved in the client's operational processes and is not bound by instructions. That he endeavors to provide the agreed services, but that the fulfillment is not necessarily given. I also strongly recommend that companies refrain from the following addition: “The freelancer is not allowed to Employees or use only limited staff”. It is better to include the following sentence in the contract: “The freelancer may use employees.”

The contractual provisions should be supreme awareness be given in order not to provide the DRB with unnecessary ammunition for a corresponding interpretation of the contract.

Is the risk of being classified as pseudo self-employed, because great for freelancers and their clients?

For a long time the DRB has been trying to make employ- ees employees and employers from freelancers. The DRB recently failed in the case of the reasoning of the "insubordination" of the Social Court in Wiesbaden. With partial abstruse argument, the DRB tried in this case to construct a self-employed employment relationship, where none existed.

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How were the arguments of the DRB in the case you have led to recognize a dummy entity?

The Deutsche Rentenversicherung Bund twisted some of the freelancer's statements into their opposite. While the freelancer had argued that he was not bound by instructions, the DRB recognized that the Company. In addition, the freelancer cannot organize his working hours independently, but this must always be coordinated with the project management and the project team. The fee is not performance-related, as the freelancer stated, but is based on the number of days worked. Since the freelancer does not have their own Capital use, there is also no entrepreneurial Risks. The fact that the freelancer performs the work independently as stated by him does not justify self-employment. According to DRB assessment was the Status of the freelancer “serving functionally”.

After the opposition was rejected, the freelancer turned to the social court. To which judgment did the Social Court come?

The Social Court found 2010 in the year, 4 years after filing the application: The 1. January 2006 Consulting work carried out by a freelancer is to be regarded as a self-employed activity which is not carried out under an employment relationship. However, this verdict of the Social Court Wiesbaden has no binding effect on other social courts or state social courts. Ultimately, each case must be fought out individually.

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