Freelancers are an integral part of the working world. Nevertheless, there are uncertainties in relation to them. The issue of bogus self-employment in particular is an important topic here. In this article, we'll tell you what you need to look out for. But first:
What is a freelancer?
A common translation of the term is "freelancer". This is where the first confusion arises, as the term is also used in Germany for professions such as lawyer, doctor or psychologist. These types of freelancers do not fall into the category of freelancers as we consider them here.
Rather, a freelancer is a freelancer who works for several employers. He is booked as an "external" for a specific activity, which is often only carried out temporarily. A classic example is working on project development. Once the project is completed, the freelancer's employment ends. He can also be booked as a consultant - for example as an expert in market research or business analysis.
Self-employed or bogus self-employed?
As freelancers are not employees, you do not have to pay social security contributions for them. There is also no protection against dismissal. However, it becomes difficult if the legislator comes to the conclusion that you are employing a "bogus self-employed person". This is the case if the collaboration has the characteristics of employment.
The term "bogus self-employment" was introduced after numerous companies replaced employee relationships with self-employed persons ("subcontractors"). The intention behind this was clear: to save on non-wage labor costs (no pension or health insurance contributions have to be paid for a self-employed person) and to make it extremely easy to terminate the contract. The state is now reacting to such practices, and the consequences can hit the client hard. To prevent this, you should have the contract checked carefully when working with freelancers.
Check the contract - what do you need to look out for?
The contract must clearly state that the freelancer is not only self-employed in appearance. This includes the following points:
- The freelancer works for several clients
- He is not predominantly working for you
- He undertakes to pay tax on his income independently
- He is not bound by instructions (very important!)
Attention:
Do not sign a contract that contains termination provisions reminiscent of those for employees. It is best to avoid the word "termination" and instead write "The collaboration can be terminated at any time with a notice period of ...". Sophisticated auditors might also be bothered by the fact that the self-employed employee receives a staff discount.
In short:
Avoid anything that could make self-employed employees look like employees.
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