If you accept contract work as a freelancer, this circumstance can already lead to the assumption of bogus-self-employment . If the suspicion is substantiated, the relevant authorities may decide to investigate further - often without your knowledge. As an experienced IT personnel service provider, we know how you can act in a legally compliant manner that will pass an audit by the pension fund, health insurance or the tax office.
Who determines whether self-employment is bogus, and who is at risk?
“There are many industries in which bogus self-employment can occur. The authorities are keeping a close eye, especially on the IT sector," notes lawyer Dr. Benno Grunewald . Once they assume that you’re engaging in bogus self-employment, disproving it requires a degree of effort and immersion into bureaucratic processes. Therefore, check your service contract carefully and note that the work you actually perform plays a big role in it.
There is a list of criteria that are checked in order to establish bogus self-employment. This includes, for example, whether you can determine your own working hours as far as possible, or whether your tasks differ from those of permanent employees. If you are free of controls and direct instructions from your client, you will usually not be considered to be engaged in bogus self-employment. Compared to employees subject to social security contributions, you will receive a significantly higher fee as a freelancer and that only for services actually rendered. It is also helpful to physically separate yourself from employees of the company for which you work as a self-employed person.
In the context of an investigation, the assumption that having several clients provides protection against claims of bogus self-employment is of secondary importance. However, this criterion does become relevant in determining whether there is an obligation to pay pension insurance as a self-employed person.
Neither self-employed persons nor their clients should independently initiate a status determination procedure with the German Pension Insurance - even though the German Pension Insurance likes to advertise this. This can very often result in lengthy proceedings that can extend over several years. Prior legal advice can prevent this from happening.
Important: The less you provide your labour, the more you provide your expertise, and the lower the financial dependence on a single client, the lower the risk that you are engaged in bogus self-employment.
Security and transparency for clients and contractors
If you apply for one of the advertised positions with us, you will always find a reference to the type of placement in the position. At GECO, you know exactly whether you are applying for a salaried position or a freelance project. Of course, our team is also available to advise you and inform you about the requirements and general conditions of the individual positions. Besides the higher fee, self-employment has additional advantages. If you also know what you want and how you would like to work together, then take a look at our job postings .
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