{"id":8346,"date":"2026-03-04T13:47:47","date_gmt":"2026-03-04T11:47:47","guid":{"rendered":"https:\/\/winheller.com\/blog\/en\/?p=8346"},"modified":"2026-03-30T16:32:35","modified_gmt":"2026-03-30T14:32:35","slug":"freelance-work-employment-distinction","status":"publish","type":"post","link":"https:\/\/winheller.com\/blog\/en\/freelance-work-employment-distinction\/","title":{"rendered":"Freelance Work or Employment? German Federal Social Court Clarifies the Distinction"},"content":{"rendered":"\n<p>The German Federal Social Court (BSG) has further clarified its case law on the <strong>distinction between dependent employment and self-employment<\/strong>. The ruling is highly relevant for all organizations that work with freelancers, for example in the areas of education, administration, projects, IT, or consulting.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Distinction between self-employment and dependent employment in Germany<\/h2>\n\n\n\n<p>The BSG once again dealt with a case in which the central point of contention was whether a permanently recurring activity agreed as \u201c<strong>freelance work<\/strong>\u201d was in fact self-employment or <strong>employment subject to social security contributions<\/strong> in Germany. In addition to the usual criteria for distinguishing between self-employment and dependent employment, the parties&#8217; intentions were ultimately decisive in this case. After a comprehensive overall assessment, the BSG concluded that the activity was self-employment and not employment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">German Criteria for assessing self-employment or employment<\/h2>\n\n\n\n<p>Whether someone is self-employed or employed is determined by an overall <strong>assessment of all circumstances<\/strong>, not by a rigid scheme. The decisive factor is not only integration into processes or the use of infrastructure, but whether genuine entrepreneurial freedom and risk remain, such as <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>free allocation of location\/time, <\/li>\n\n\n\n<li>selection and reduction of orders, <\/li>\n\n\n\n<li>independent organization of work, and <\/li>\n\n\n\n<li>remuneration with entrepreneurial risk while having several clients and your own market presence.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">BSG: Mutual agreement between the parties can be decisive<\/h3>\n\n\n\n<p>On the one hand, the BSG points out that mandatory <strong>social security regulations cannot be \u201cwaived\u201d<\/strong> by agreement between the parties. However, it also makes it clear that the contract designation and thus the mutual agreement between the parties can be used as a decisive factor if the objective circumstances do not indicate a clear preference for one side. If, therefore, all objective evidence in the overall assessment points equally strongly towards employment and self-employment, the common intention of the parties (\u201cself-employed\u201d or \u201cfreelancer\u201d) may, in exceptional cases, <strong>tip the scales<\/strong>.<\/p>\n\n\n\n<p>The ruling is in line with the previous interpretation of Section 7 of the German Social Code (SGB IV), but sharpens the focus:<strong> employment remains characterized by personal dependence, integration, and the right to issue instructions<\/strong>, while self-employment is characterized by <strong>entrepreneurial risk, extensive freedom of organization, and an independent business structure<\/strong>. Industry-specific requirements and standard processes may explain a certain degree of integration, but do not automatically lead to employment in themselves.<\/p>\n\n\n\n<p>At the same time, the BSG places greater emphasis on<strong> actual entrepreneurial freedom of disposition<\/strong>, i.e. the ability to select, reduce, or reallocate orders in favor of other clients and thus manage one&#8217;s own economic risk. Against this background, it remains the case that the contract designation is only a weak indication, but one that takes on particular weight when the objective circumstances do not reveal a clear preference for one side.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Significance for nonprofit organizations and companies in Germany<\/h2>\n\n\n\n<p>The ruling is relevant in practice for associations, foundations, nonprofit limited liability companies, and companies in several respects. The BSG emphasizes once again that <strong>freelance work remains possible<\/strong> but requires that actual <strong>entrepreneurial freedom<\/strong> exists and that freelancers demonstrably have their <strong>own scope for decision-making<\/strong> in terms of location, time, order structure, and working methods. Contracts that are effectively lived as an employment relationship, for example with <strong>fixed working hours<\/strong>, comprehensive instructions, and full integration into the team, continue to carry a high risk of <strong><a href=\"https:\/\/www.winheller.com\/en\/business-law\/labor-employment-law\/false-self-employment-germany.html\" title=\"false self-employment\">false self-employment<\/a><\/strong>. Working exclusively for only one organization tends to indicate employment, while multiple clients, a separate market presence, and independent entrepreneurial activities support classification as self-employed.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><a href=\"https:\/\/www.winheller.com\/en\/news\/newsletters\/nonprofit-law-news.html\">Would you like to receive news like this in your inbox every month? Subscribe to our newsletter &#8220;German Nonprofit Update&#8221;.<\/a><\/h4>\n\n\n\n<p>The use of the organization&#8217;s premises, IT, and processes is permitted, but should be structured in a way that is consistent with self-employment, i.e. optional, transparent, and, if necessary, subject to a usage fee. Remuneration models with genuine entrepreneurial risk, such as flat-rate or sales-based models, without overtime pay and with the possibility of reductions in the event of poor performance, are more conducive to self-employment than pure hourly wage models. Ultimately, what matters is how the collaboration is actually carried out, not what is written in the contract. If the practice shifts toward employee-like structures, even an originally viable freelance model can be overturned under social security law.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Legally compliant drafting of fee agreements for NPOs and companies<\/h2>\n\n\n\n<p>The ruling clearly states that simply<strong> being labeled as \u201cself-employed\u201d is not sufficient <\/strong>to avoid social security obligations, but can be decisive if the other indications neither support nor contradict dependent employment or self-employment. Although this is a <strong>positive signal<\/strong> from the BSG in the direction of private autonomy, one cannot and should not rely on this alone.<\/p>\n\n\n\n<p>In order to minimize risks such as additional contribution claims, interest, and liability consequences, WINHELLER&#8217;s specialized attorneys provide support in the following areas:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Reviewing your fee contracts for the use of freelancers in accordance with the current BSG line and identifying risk constellations<\/li>\n\n\n\n<li>Revising fee contracts, service descriptions, and remuneration models in light of the BSG criteria<\/li>\n\n\n\n<li>Comparing contracts and actual practice; developing concrete proposals for adjustments (e.g. regarding reporting structures, use of infrastructure, contract design)<\/li>\n\n\n\n<li>Development of legally compliant models for freelance work in nonprofit organizations and companies, tailored to your specific areas (e.g. education, administration, IT, consulting, project work)<\/li>\n<\/ul>\n\n\n\n<p>Feel free to <strong><a href=\"https:\/\/www.winheller.com\/en\/contactdirections.html\" title=\"contact us\">contact us<\/a><\/strong>!<\/p>\n\n\n\n<p><a href=\"https:\/\/www.google.com\/search?q=BSG+Urteil+22.07.2025+B+12+BA+7%2F23+R\">BSG, judgment of July 22, 2025, B 12 BA 7\/23 R<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The German Federal Social Court (BSG) has further clarified its case law on the distinction between dependent employment and self-employment. The ruling is highly relevant for all organizations that work with freelancers, for example in the areas of education, administration, projects, [&hellip;]<\/p>\n","protected":false},"author":67,"featured_media":8352,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[783,1736],"tags":[],"class_list":["post-8346","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment-law","category-employment-law-npo"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/winheller.com\/blog\/en\/wp-json\/wp\/v2\/posts\/8346","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/winheller.com\/blog\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/winheller.com\/blog\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/winheller.com\/blog\/en\/wp-json\/wp\/v2\/users\/67"}],"replies":[{"embeddable":true,"href":"https:\/\/winheller.com\/blog\/en\/wp-json\/wp\/v2\/comments?post=8346"}],"version-history":[{"count":4,"href":"https:\/\/winheller.com\/blog\/en\/wp-json\/wp\/v2\/posts\/8346\/revisions"}],"predecessor-version":[{"id":8388,"href":"https:\/\/winheller.com\/blog\/en\/wp-json\/wp\/v2\/posts\/8346\/revisions\/8388"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/winheller.com\/blog\/en\/wp-json\/wp\/v2\/media\/8352"}],"wp:attachment":[{"href":"https:\/\/winheller.com\/blog\/en\/wp-json\/wp\/v2\/media?parent=8346"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/winheller.com\/blog\/en\/wp-json\/wp\/v2\/categories?post=8346"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/winheller.com\/blog\/en\/wp-json\/wp\/v2\/tags?post=8346"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}