Orrick's 101 Employment Law in Germany Legal Q&A | the Many Pitfalls Of Using Contractors

This Legal Q&A two pager gives an overview of the potential problems of using contractors and freelancers in Germany, in particular the risk of misclassification. Incorrectly classifying an employee as a contractor can have considerable effects on the company – from retroactive liability for taxes and social security contributions to reputation damage and even criminal liability of the company's managing directors in certain cases. It is therefore crucial to know the main criteria for determining them correctly.

What is the difference between a contractor and an employee?

A contractor or freelancer is defined as an individual performing services on an independent basis, assuming the sole entrepreneurial risk for his services or business. The performance of services is usually regulated in a service contract (Dienstvertrag), or, where they relate to a definable project to be completed, in a contract for works (Werkvertrag). An employment relationship, on the other hand, will be governed by an employment contract, requiring the employee to perform services in accordance with the direct instructions and supervision of his employer while being integrated into the employer's organization.

Please see full Publication below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Orrick, Herrington & Sutcliffe LLP | Attorney Advertising

Written by:

Orrick, Herrington & Sutcliffe LLP

Orrick, Herrington & Sutcliffe LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.