Once again, the German Federal Social Court (BSG) addressed the distinction between dependent and self-employed work, thereby reinforcing the now very clear position of the 12th Senate. This has significant practical implications for all organizations in Germany that work with freelancers, not just in the healthcare sector.
Surgeon operates on his own patients in a private clinic
On March 5, 2026, the BSG (Case B 12 BA 17/23 R) heard the case of a specialist surgeon who is a co-shareholder in a private medical group practice and a medical care center (MVZ) and who also works as a surgeon in a private clinic. There, he operates exclusively on his own patients, whom he has previously treated on an outpatient basis at his medical office. He independently determines the need for surgery, coordinates surgery dates directly with the clinic, and considers himself a freelance surgeon not bound by duty rosters or clinic meetings.
Nevertheless, in the status determination proceedings the German Pension Insurance (DRV) found that this constituted employment subject to social insurance contributions, and both the Social Court of Karlsruhe and the Regional Social Court of Baden-Württemberg confirmed this classification. The decisive factor was the integration into the clinic’s organization rather than the freedom from medical supervision.
Employment relationship despite the absence of an employment contract
The clinic entered into inpatient treatment contracts, maintained patient records, organized admissions, nursing care, and discharge management, and provided the surgical team and infrastructure. In the view of the DRV and the lower courts, the former medical office’s patients became patients of the clinic, and the surgeon performed a service owed by the clinic within its structure. The courts ruled out the existence of a relevant entrepreneurial risk, as the physician received a fixed fee for surgeries without bearing the typical risk of bad debt or the clinic’s own inpatient structural costs.
Despite the absence of a written employment contract, the involvement of the medical office, the company, and the MVZ, or the fact that the doctor operated only on his own patients, the unanimous assessment of the arrangement as dependent employment without a viable basis for self-employment remained unchanged. This very strict view of the DRV and the courts is indeed also due to the regulatory requirements for clinics, according to which self-employed activities are only considered in exceptional cases and require “substantial evidence” of genuine self-employment. However, the decisions also send a clear signal to all other self-employed individuals.
Criteria for dependent employment in Germany
The Federal Social Court reviews the classifications made by the German Pension Insurance and lower courts in appeals. Although the reasoning behind the decision has not yet been published, the hearing report dated March 5, 2026, already indicates that the Senate intends to further tighten its standards.
Since the so-called Herrenberg ruling on music school teachers, the BSG has emphasized all the more in its decisions regarding the distinction between self-employment and dependent employment that being subject to instructions, integration into the employer’s work organization, and the absence of entrepreneurial risk typically lead to dependent employment. The decisive factor here is not the occupational group, but whether a person performs the main service owed to the client within the client’s structures.
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In recent rulings (including B 12 BA 7/23 R), the 12th Senate has clarified that self-employment requires demonstrable entrepreneurial freedom (freedom to choose assignments, multiple clients, an independent market presence, and assumption of one’s own risk), whereas close organizational integration and compensation without genuine risk typically indicate employment. Only in very rare cases does the BSG allow the parties’ intentions to be decisive if, after a careful overall assessment, the objective criteria are entirely equally applicable to both sides. The current case also falls along these lines: The doctor’s formal self-employment, his ownership stake in the practice, and his membership in the pension fund are not sufficient to override his clear integration into the hospital’s structures and the absence of his own inpatient business risk.
Risks for NPOs and businesses: social security obligations
In practice, this sends a clear message to all businesses and organizations that work with freelance professionals in Germany: Anyone who consistently performs an organization’s core functions, uses its infrastructure, staff and processes, adheres to its guidelines, and does not present themselves externally as an independent business will very quickly fall under the category of dependent employment under German social security law.
This applies equally to IT freelancers, project managers, teachers, administrative staff, or consultants if they are effectively integrated like internal employees and work exclusively or almost exclusively for a single organization.
Conversely, freelance employment models are more likely to be viable if the freelancers have multiple clients, can select and reduce the number of assignments, decide independently on fees, location, time, and manner of execution, use their own staff or resources, operate independently in the market, and receive compensation that involves genuine entrepreneurial risk. It is also important that the contract terms align with actual practice. An arrangement formally designated as a fee-based contract but practiced in daily operations like an employment relationship – with fixed integration, team structures, and comprehensive instructions – will generally fail to convince the German Pension Insurance and the social courts.
German NPOs should critically review their employment models
In this context, clear contract drafting and practical alignment with current case law are becoming increasingly important. The German Bundestag recently extended the validity of the transitional provision in Section 127 of SGB IV once again, this time until December 31, 2027, to give companies and organizations sufficient time to adjust and adapt their practices. While this extension provides a time buffer, it does not replace the need to
- critically review existing freelance models,
- revise contracts with freelance workers at an early stage, and
- promptly transition organizational practices to clearly structured employment models or properly structured, genuine self-employment arrangements.
Our specialized attorneys are happy to assist you with:
- reviewing your fee agreements for the engagement of independent contractors in accordance with the current BSG guidelines and identifying potential risks
- revising fee agreements, service descriptions, and compensation models in light of the BSG criteria
- aligning contracts with actual practice and developing concrete proposals for adjustments (e.g. regarding reporting structures, use of infrastructure, and contract design)
- developing legally sound models for freelance work in nonprofit organizations and companies, tailored to your specific areas (e.g. teaching, administration, IT, consulting, and project work)
