(English) Six approaches to overcoming the existing legal uncertainty – Which are the most effective?
How can the existing legal uncertainty regarding bogus self-employment and status assessment procedures be overcome? How can the ever-increasing uncertainty among clients and its increasingly massive consequences for the self-employed, companies and the economy be stopped?
Since spring 2015, four and a half years ago, we at the VGSD have been working intensively on this topic, have held countless discussions, written position papers, questioned experts and discussed ideas for solutions. That’s why we recently asked you to provide feedback and make suggestions for improvement on the BMAS website.
Variety of ideas for the following catalogue of solutions condensed
We have evaluated all these sources and condensed our reflections from many years of debate into the following six approaches. The reason for this was the meeting with State Secretary Dr. Rolf Schmachtenberg on 26.08.2019.
Further talks with State Secretary Schmachtenberg, the German Pension Insurance, employers‘ associations and trade unions, representatives of clients and contractors and other affected parties are to follow. These will give us the opportunity to promote our solution ideas and discuss them with decision-makers in a targeted manner. That is why your opinion is important to us: Which proposals do you consider particularly suitable? (We are happy to explain individual ideas. If you have a question, please use the comment function.)
Some of the following six solutions could be implemented relatively quickly, others would require a change in the law. We believe that immediate action should try to calm the market, use the legal opportunities below changes in the law to quickly achieve initial improvements, and then, with the necessary care, achieve longer-term effective solutions through changes in the law.
1) Immediate measures
a) Appointment of technical discussionsn analogous to the technical discussions for the arrangement of the old age provision obligation for independent ones – similar circle of participants
b) Statements/clarifications, which contribute to the reassurance of the client
2) Cross-industry Positive Criteria
Positive criterion means that the fulfilment of one or more criteria speaks in favour of self-employment.
a) Fee amount – not: (Annual) income level! – as a central new criterion. – Must be higher than comparable employee for the same job/qualification and of course as minimum wage (surcharge for employer’s contribution to SV, vacation and sick leave, capacity utilization risk, operating expenses as well as expenses for acquisition and administration).
„Particular importance is attached to the fee amount as a criterion. In all our considerations, discussions and surveys on this subject, we have repeatedly come across this characteristic. The Federal Social Court has also recently strengthened this criterion (in order to row back a little later). Together with our other proposals, we believe that it would have the potential to significantly improve both pay and pension provision for the self-employed, which is our common goal.“
b) Old-age provision
i) for future self-employed persons after introduction of the planned obligation to provide for old age easily verifiable
ii) in the case of self-employed, however, comprehensive testing (in the sense of permanent monitoring of a duty) is extremely time-consuming – in individual cases, however, in the sense of a further positive criterion, it is quite conceivable – e.g. evaluation by a competent body, association, etc. – but this is not the case.
iii) Recognition of the voluntary standard contribution to the German pension insurance scheme or contributions in line with income as a positive characteristic
iv) Excursus – motto: incentives for retirement provision instead of more and more compulsion, e.g.
(1) Acknowledge mix of private and statutory old-age provision with AV obligation
(2) Possibility to catch up on contributions missed in the start-up phase
(3) Equal treatment of voluntary contributions,
(4) Introduction of an old-age provision account based on the US model as an option within the scope of the old-age provision obligation (secure investment in investment funds and ETFs, payouts or retirement at retirement age)
(5) General: Equal treatment of private pension provision (e.g. Rüruprente) with statutory pension insurance with regard to insolvency security
c) Employer status: At least one employee liable to social insurance contributions
d) Shareholders of a corporation with a certain minimum interest (e.g. 50 percent)
e) Existence of professional liability insurance (a central criterion in Great Britain)
f) Voluntarity (in contrast to exploitative contractual relationships)
i) ways of documenting voluntary or involuntary behaviour and/or information obligations
(ii) membership of professional associations, ’self-employed trade unions‘, cooperatives, etc. providing information, advice and support
iii) Voluntariness is to be assumed from a certain period of independence or cooperation onwards.
iv) No „adhesion contracts“ with, for example, very extensive customer protection and license agreements that make it very difficult to acquire other customers</block quota>.
g) Certain contract types
i) Contracts for work and services
ii) Contracts with predominantly success-based payment (distribution! But e.g. also author’s fees for books)</block ratio>
h) Very pragmatic in terms of number and size of orders
i) Certain number of clients,
ii) small orders (trivial limit) or
iii) Sales share of other customers (5/6 rule)
3) Sector-specific concretization
e.g. in the form of a circular, using the know-how of professional and industry associations, also involving the client’s side
a) Which criteria are factually logical>necessary for certain activities necessary – regardless of whether self-employed or employed – and therefore cannot be used as a characteristic for or against self-employment? Examples:
i) Trainer must know time, place and topic of the training … cannot be a negative criterion
ii) IT projects have long project duration and training period, high communication needs …
iii) In agile IT projects, certain meetings and forms of task definition (backlog) are defined by the method …
b) Specification of the positive criterion „amount of fee“: How are certain activities in an industry typically paid for? How can line, page and unit prices be converted into time units? Which surcharges are appropriate depending on the industry? Which fees are thus clearly below the minimum wage or below the earnings of comparable employees?
4) Status assessment procedure
a) Person-specific or Activity-specific, not Order-specific status determination
b) Binding to status decisions for the future („forward decision“), no retroactive status change, exception: intentionally incorrect representation of the facts (model: Switzerland)
c) Questionnaire shorter, less misleading
d) Publish implementation instructions
e) Bring process online, drastic reduction of processing time
f) Self-/rapid test
g) Realistic, better fulfillable prerequisites for the liberating effect of the status assessment procedure (so that no false self-employment occurs during the examination)
h) Set up controlling via status determination procedures and create more transparency (number, industries, initiator, goal, result)
be proportionate in the face of unpredictable and often contradictory decisions
a) Allow stock permit again
b) No retroactive change of status (see 4b)
c) Abolish net wage fiction (currently inconsistent application)
d) Social security contributions between principal and principal split
e) Adjust interest on arrears to the current interest situation, if necessary base rate plus premium
6) >Ease conflict of interest
The Deutsche Rentenversicherung (German Pension Insurance) and the Clearing House Richter und Nutznießer (Judge and Beneficiary) located there are in one
a) Decision about status determination by other place e.g. Tax office
b) Establishment of an advisory board or other informal body to the clearing house (quick escalation and decision-making of problem cases, because legal action is too lengthy, bringing in practical knowledge of the client and contractor)