Pseudo self-employed? So quickly you are no longer an entrepreneur - but an employee!

Suddenly no longer a boss: when "self-employed" is only on paper

Many freelancers dream of freelance work - their own hours, no bosses, full self-realization. But what if the dream is actually a trap? When the apparent freedom is just an illusion and social security suddenly announces: "Congratulations, you are an employee!" Welcome to the world of bogus self-employment - a real risk for anyone who moves between a job and entrepreneurship.

Because if you work as a self-employed person but are integrated into the company like an employee, you may not pay social security contributions - even though you should. This can be really expensive - retroactively!

Where does bogus self-employment begin?

Very simple: If you work like an employee but are contractually registered as self-employed. Social insurance doesn't check what the contract is called, but what your day-to-day work looks like. And all it takes is a little too much proximity to the client and you suddenly find yourself with one foot in the employee relationship.

Classic signs of bogus self-employment are:

• You only have one client
• You work in their office, with fixed working hours
• You have to coordinate vacations
• You get paid regularly, even if you are ill
• You don't have your own employees
• You are involved in internal processes, e.g. regular meetings or reporting

All this speaks more in favor of an employment relationship. And that means: social security contributions - retroactively! This means back payments for the employer and, in case of doubt, for you too.

These professions are particularly at risk

In some sectors, bogus self-employment is not an isolated case, but an everyday occurrence. Particularly affected are

• IT consultants and programmers
• Graphic designer, copywriter, translator
• Honorary doctors and teaching staff
• Drivers, craftsmen and cleaning staff

Many of them work on a project basis, often with just one client and without much personal responsibility. This is often enough for social insurance to recognize them as "dependent employees".

What can you do? How to protect yourself from the downward spiral

The good news is that you can protect yourself. Clients and employees can apply for a so-called status determination procedure with the German Pension Insurance. It sounds cumbersome, but it helps: the procedure officially checks whether you are self-employed or an employee.

But beware: even if you set up your own GmbH, for example, this does not automatically mean that you are on the safe side. In the case of a one-man GmbH and clear integration into the client's organization, bogus self-employment can still be established.

So it's best to make a clear distinction from the outset, document it properly and seek legal advice.

What happens if it does rattle?

If bogus self-employment is detected, it can be really expensive - especially for the client. This is because they have to pay all social security contributions - sometimes retroactively for years! In the case of intent, there is even the threat of criminal charges.

And the contractor also has problems: invoices have to be corrected, VAT paid back and the business deregistered. Plus: anyone who was "pseudo" self-employed is suddenly a regular employee - with all the consequences.

Legal Bermuda Triangle for freelancers and clients

The state naturally wants the social security funds to remain full - and therefore keeps a very close eye on anyone who appears to be self-employed but works as an employee.

Our tip: If you seriously want to be self-employed, you should not only rely on the contract, but also act like a real entrepreneur in everyday life - with your own customers, your own appearance, your own responsibility.

And to all clients: Anyone who thinks they can save on social security contributions with a simple "freelancer contract" is playing with fire. This can be really expensive - including under criminal law.

Our conclusion: If it looks, works and behaves like an employee - then it probably is one. Anything else is dangerous.