Avoid bogus self-employment in employment relationships

In the search for a form of agreement that allows special and possibly time-limited offers from specialists or self-employed people, most studios sooner or later come across so-called Freelancers or freelancersBy the way, it is not only common in the fitness and health industry, but also in the education industry to work on account and conclude fee contracts. However, the Working with freelancers is extremely risky financially.

What can happen:

• Audit of the German Pension Insurance
• Carrying out the status clarification
• Determination of the “dependent employment relationship” of a trainer

Audit

Let’s assume that the studio owner enters into a fee-based contract with a trainer and the trainer successfully offers courses in the studio for four years. Every four years, employers must provide proof to the German Pension Insurance (RV) as part of a company audit that they have correctly calculated the social security contributions withheld and paid them in the correct amount.

Is only in retrospect determined that an employment relationship subject to social insurance contributions exists, threatens to have to pay all social security contributions for employment retroactively up to four years. If intent is established, claims can even be made for up to 30 years.

False self-employment

The examination The pension insurance takes place after the Provision of the Social Code, Volume Four The regulations for social insurance are regulated there. The decisive factor for determining whether it is a genuine self-employed or to a False self-employment is first of all the relatively short provision of Section 7 Paragraph 1 SGB IV:

§ 7 SGB IV (employment)

(1) Employment is dependent work, in particular in an employment relationship. Indications of employment are Activity according to instructions and a Integration into the work organisation of the person giving the instructions.

Not only have endless treatises been written about the indications which, according to the text of the law, indicate an employment relationship subject to social insurance contributions, but they have also been interpreted and explained by case law.

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Danger: The Description of an activity (e.g.: “freelance contract”, “fee contract”) cannot determine the employment status, it only has a Indicative effect.

Criteria that prevent self-employment

The usual argumentation of the German Federal Pension Insurance (DRB), which leads to the assessment of bogus self-employment, is the following:

An employee is someone who is personally dependent on his or her employer. This is of course always the case when a person receives benefits that are only granted in the employment relationship, such as for example, vacation and continued salary payment in case of illness.

Personal dependence requires further Integration into the company and Subordination to the employer’s right to give instructions in terms of time, place and type of work performance.

In contrast, a Free scheduling of working hoursone free design of work performancewearing a own, significant entrepreneurial risk one self-employment mean.

However, additionally still the entrepreneurial riskthat exists for the person being assessed. The Federal Social Court (BSG) already stressed in an early decision that a decisive criterion for the existence of an entrepreneurial risk is whether one’s own capital or one’s own labour is used even with the risk of loss, i.e. the success of the use of material or personal resources is uncertain.

Integration into the organization of the person giving the instructions

Courts have repeatedly criticized fitness studios for not being able to freely choose the time and place due to the course schedules and opening hours.

Possibility (place/time/type of work):

However, if a trainer approaches the studio with an offer and offers the studio free appointments, he goes of his own free will to a specific location of his choice under his own conditions. For example, a trainer approached a studio with the following offer:

“Dear Sir or Madam, I am XY, I have training in the field of Z and am a Z-licensed trainer. I could offer my back courses in your studio every Monday and Thursday at 5, 6 or 7 p.m. until October of this year. I will bring the necessary equipment and my music. I charge a fee of XXX per course. If fewer than five participants register, I give the studio the right to cancel the course without replacement. You would then just have to let me know the number of registrations 24 hours before the start of the course. I would be happy to hear from you if you like my suggestion.”

The entrepreneurial risk is not recognized in most cases if the trainer no own capital with the risk of loss insert must.

It must also be checked whether further paid work for other studios are available. The Binding to only one contractual partner is a clear indication of bogus self-employmentIf, on the other hand, the freelance trainer has an employee who can represent him if necessary, this again speaks in favor of self-employment.

Status determination procedure

The risk of having to pay social security contributions for a period of four years (the amounts are usually at least five-digit) can only be minimized by a status determination procedure before starting work carries out.

The freelancer can also have such a procedure carried out on his own. It is therefore worth asking whether the freelancer has already had his status determined.

Here you should make sure that the Determination of current status In case of doubt, the client, in this case the studio operator, can also have a status procedure carried out himself.

If the DRB determines that the trainer is self-employed, he or she can work as such without any concerns.

For all legal questions relating to day-to-day studio life, the DSSV legal department offers the opportunity to receive free initial legal advice with an assessment of the legal situation within the framework of an existing membership, for example after receiving a certificate of termination, to review contract clauses or on employment law issues.