Report bogus self-employment
If you realize that you are bogus self-employed or if the lawyer found this out during his examination, where can you report bogus self-employment? Most cases of bogus self-employment are reported by competitors.
Contact persons for this, but also for regular “voluntary disclosures” are (alphabetically):
- German pension insurance
- Public prosecutor
How is bogus self-employment reported? There is no statutory formal requirement for the notification; it can also be submitted verbally.
What is the threat of bogus self-employment?
The state is against the bogus self-employment with the Black Labor Act ( SchwarzArbG ) by defining bogus self-employment as undeclared work ( § 1 (2) No. 1 SchwarzArbG ). The FKS, the financial control of undeclared work of the main customs offices, is responsible for the review and control of suspicious employment relationships .
Because the employee’s share (social insurance) was not paid for illegal work, there is also a violation of the Criminal Code ( Section 266a (1) StGB ).
The two parties can expect the following consequences:
1. Consequences under tax law
- The sales tax on the invoices submitted by the bogus self-employed are ineffective and must be reversed.
- The input tax payments from employers and the bogus self-employed must also be corrected.
- The wage tax must be paid retrospectively.
- The income tax paid by the (bogus) self-employed is offset against the wage tax.
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2. Consequences under labor law
- The bogus self-employed person is classified as an employee with all rights and obligations to whom labor law, tax law and social law apply. Collective agreements and works agreements also apply and the bogus self-employed person is entitled to vacation and continued wages in the event of illness.
- All social security contributions are to be paid retrospectively. Usually up to 4 years, but up to 30 years retrospectively in the case of deliberate action.
3. Criminal consequences
The penal consequences result from the social security contributions not paid (Section 266a StGB) : “Anyone who, as an employer, withholds employee contributions to social security including employment promotion, regardless of whether wages are paid, is subject to imprisonment for up to five years or with Fined. ”
The checklist – check bogus self-employment
When checking bogus self-employment, the individual case must always be checked. However, some clues can help you in advance to assess your situation.
To do this, you should ask yourself the following:
- Are you free of instructions in your work, i.e. not bound by the client apart from necessary instructions?
- Are you allowed to determine your working hours yourself and divide them up freely?
- Are you allowed to determine your workplace at least predominantly yourself?
- Do you work in the same area and do the same activities as before as an employee for the same client?
- Do you have a spatially and technically separate workplace (separate hardware and software without the employer’s accessibility?)
- Are you openly self-employed towards third parties?
- Is the independence underlined by a corresponding website appearance, advertising and active acquisition activity?
- Do you have your own company logo, your own stationery or your own work clothes that differentiate you from the client?
If you can answer YES to all or at least most of the questions, then you are in no danger of seemingly self-employed.
Anyone who inadvertently or even deliberately fails to report self-employment as such to the authorities must expect that the social security contributions for the past period will be claimed. This can be a period of up to 30 years if it can be proven that the self-employment has existed for such a long time.
The Federal Labor Court has determined exactly when a regular employment relationship exists: An employee is someone who, subject to instructions, performs externally determined work in personal dependency. Pseudo self-employment is not a trivial offense and is equated with illegal work by the legislature.
The legislature is extremely interested in stopping the abuse here, and therefore lets the main customs offices carry out checks if there is suspicion of bogus self-employment. It is therefore urgently advisable to check carefully whether the professional activity is self-employed or whether you clearly have the status of an employee. Such a disguised bogus self-employment can quickly lead to bankruptcy of the company or personal bankruptcy due to the additional demands of the state, social security and health insurance .
If employers and employees are not sure whether it is a bogus self-employment or not, they can inquire at the clearing office of the Deutsche Rentenversicherung Bund, which will carry out a status determination procedure and thus determine what type of employment relationship is involved .