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Pseudo self-employment: definition and practical examples

Pseudo self-employment: definition and practical examples

Pseudo self-employment

refers to a form of work in which a person is officially considered self-employed but works under conditions that are more akin to an employment relationship. This is often done to avoid social security costs and labor law obligations.

Characteristics of bogus self-employment

Some characteristics that may indicate bogus self-employment are:

  • Instruction-bound: The "self-employed person" is subject to the instructions of the client in a similar way to an employee.
  • Integration into the work organization: The "self-employed person" is integrated into the day-to-day work and structures of the client.
  • No entrepreneurial freedom: The "self-employed person" has no operating resources of his own and bears no entrepreneurial risk.
  • Exclusivity: The "self-employed person" works predominantly or exclusively for one client.

Practical examples

  1. IT service provider
    An IT specialist is hired by a company as a freelance consultant. However, he regularly works on the company's premises, uses its equipment and has fixed working hours. He also receives instructions from a superior and only works for this one company. This strongly suggests bogus self-employment.
  2. Parcel service driver
    A parcel service hires drivers as "self-employed". These drivers use the service's vehicles and work clothing, adhere to specified routes and schedules and are not allowed to accept any other clients. This is also a clear case of bogus self-employment.
  3. Journalists
    A freelance journalist writes exclusively for a newspaper, receives regular assignments, is subject to editorial guidelines and has a permanent job in the editorial department. Despite his official status as a freelancer, he effectively works like an employee.

Consequences of bogus self-employment

If bogus self-employment is discovered, this can have considerable legal and financial consequences for both parties:

  • Back payment of social security contributions: The client must pay social security contributions retroactively.
  • Claims under labor law: The bogus self-employed person can assert claims under labor law, such as protection against dismissal or vacation entitlement.
  • Tax consequences: This can result in additional tax payments and possible penalties for both parties.

Avoidance of bogus self-employment

In order to avoid bogus self-employment, clients and contractors should make clear agreements and ensure that the criteria for self-employment are actually met:

  • The self-employed person should have several clients.
  • The self-employed person should use their own resources and bear entrepreneurial risk.
  • The work should be carried out independently and without being bound by instructions.

Bogus self-employment is a complex issue that requires careful attention in order to avoid legal and financial pitfalls.

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Disclaimer: Please note that the above dates, tax rates and regulations may change over time. Do not make any independent decisions without first consulting an expert for your individual situation. It is in your interest to always receive individual information from an experienced expert who knows your situation.

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