What has really changed after the introduction of Werkvertragsgesetz* in Germany?

What has really changed after the introduction of Werkvertragsgesetz* in Germany?

At the beginning of the year, we have already reported that the new law on the supply of temporary employees (personnel leasing) will come into force on April 1, 2017, and the BGB (German Civil Code) will be supplemented by a new paragraph (§611a). Today, after the introduction of the new law, we would like to give you a brief overview of what has actually changed for the self-employed part of the work force after the introduction.

What has really changed after the introduction of Werkvertragsgesetz* in Germany?

The newly added § 611a BGB deals with the concept of the employment contract and is thus assigned to civil and labor law. The social law applied by Deutsche Rentenversicherung (German Pension Insurance) to the assessment of self-employment is not affected by this. There must also be an overall assessment of the circumstances in order to be able to assess whether it is an independent or a dependent activity. In practice, therefore, almost nothing has changed, and the previously defined concept of the law on the German Werkvertrag is misleading for those concerned.

Nevertheless, some clients are uncertain and sensitive about the reform and wish to carry out a procedure to establish the insurance status when buying the services of a freelancer / self-employed consultant. In some cases, companies have even thought of retaining part of the fee as security until the procedure is completed. You can find more information on the topic of status-finding procedures in one of our last contributions.

In the past, some companies have decided to bridge temporary requirements only by making use of temporary workers (not self-employed Consultants), as to avoid a presumed risk. From our point of view, however, it is questionable whether this will continue to be feasible in the future, as the changes in the law temporary employees / personnel leasing are serious and raise many new hurdles for companies. Another point is that in our industry, the life sciences industry, highly qualified specialists will continue to provide their services as self-employed rather than as an employee.


Important indication of independence: The amount of the fee’


Even if the new laws do not lead to ground-breaking changes for self-employed consultants, the Federal Social Court of Appeal has issued a judgment on March 31, 2017, which will be pointing the way in future cases. The press release shows that in addition to the assessment of the overall circumstances, the amount of the fee of the self-employed consultant played a not insignificant role in the assessments by Deutsche Rentenversicherung. So, in other words, if you earn enough to take care of yourself as a consultant, this can be seen as an indication for self-employment.

The complete press release can be found here.

In summary, it can be said that the previously existing grey area “quasi self-employment” (Scheinselbstständigkeit) will remain a grey area. It remains unavoidable to keep dealing sensitively with this topic. You can find our recommendations here and here.

* simply put, Werkvertrag in German means, that a work / result is due at the end of a contract, rather than defining a goal of a project and paying a consultant on an hourly basis for his/her performance.

Note: This entry does not constitute legal advice.
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