Social security issues are becoming increasingly important in business practice. Not only are the ever more complex legal requirements of importance, but also the increasing sensitivity of social security institutions, tax authorities and, last but not least, the courts. The following is a more detailed description of our main areas of practice, along with a more in-depth look at the challenges and risks that companies face in the context of social security law.

Even before commencing business activities or making changes to the corporate structure, it is important to identify and minimize social security risks. These include, among other things:

Contractual arrangements: Review and adjustment of employment or service contracts, in particular for external employees and freelancers.
Organizational structure: Adaptation of internal processes (e.g. instruction and reporting lines) to avoid ambiguities in social security obligations.
Continuous monitoring: Ongoing review of existing employment relationships and forms of cooperation for the early detection of potential bogus self-employment or other circumstances that may result in liability for contributions.
The aim is to exclude possible additional contribution demands, fines or even criminal consequences from the outset.

One of the most common problems in practice concerns the distinction between self-employment and dependent employment. Here, we not only advise you from a legal point of view, but also accompany you through the entire process:

Contract review and design: We support you in formulating contracts so that your cooperation with freelancers or external service providers meets the requirements of the social insurance agencies.
Monitoring ongoing projects: Since an employment relationship can change over time, it makes sense to regularly monitor the cooperation in order to react to any changes in good time.
Status assessment procedure: In particular, the status assessment procedure with the German Pension Insurance (Section 7a SGB IV) plays an important role. We support you in the application process, prepare the necessary documents and represent your interests vis-à-vis the German Pension Insurance.
Conflict resolution and legal representation: Should a claim for back-payments or a fine be issued, we will represent your company in objection and legal proceedings before the social courts.
With early and careful examination, high back payment claims and long-term legal disputes can be avoided.

The question of whether managing directors, shareholders or shareholder-managers are subject to social security contributions is particularly complex in German law. Relevant aspects are:

Shareholder status: Possibilities of exerting influence and participating in the share capital can establish an exemption from the social security contribution requirement.
Organ status: The specific form of the employment contract, the dependency on instructions and voting rights in the company are crucial.
Case law and administrative instructions: The case law of the Federal Social Court is constantly changing with regard to the distinction between self-employment and dependent employment. The German Pension Insurance also regularly adjusts its administrative practice.
We will review your corporate structures, advise you on contractual and organizational changes, and actively advocate for your interests in the event of disputes with social insurance agencies.

Companies are obliged to tolerate company audits by the German Pension Insurance at regular intervals (§§ 28p, 28q SGB IV). In particular, the proper payment of social security contributions and the correct classification of employees are checked. Our support includes:

Preparation for the audit: Review of all relevant documents (contracts, payslips, status assessments) and identification of possible weaknesses.
Support during the audit: We are in contact with the auditors to clarify any ambiguities, thus avoiding an escalation of the audit process.
Defense against additional contribution demands: If the audit leads to demands for back payments or late fees, we will represent your company in the appeal process and in court.
Implementation of preventive measures: Joint development of guidelines and processes to ensure that you can pass future audits with flying colors and without any objections.
This minimizes financial risks and strengthens compliance in the company.

Subcontractor liability is a key issue in the construction industry (§ 28e (3a) SGB IV). If subcontractors fail to pay the due social security contributions properly, the general contractor or client can be held liable. The following aspects are essential:

Contractual safeguards: We can support you in implementing contractual clauses and control mechanisms that you can use to protect yourself against subcontractors.
Risk assessment: The risk can be reduced by means of documents and evidence (e.g. clearance certificates).
Rights of recourse: Should the main contractor be liable for the subcontractor's social security contributions, we will examine the possibilities of recourse and represent your interests in the corresponding proceedings.
Our advice is aimed at ensuring that your construction projects can be implemented without unnecessary financial burdens or legal disputes.

Social security law for companies is regularly interlinked with other areas of law. Particularly important interfaces exist with:

Employment law: In the case of "pseudo self-employment" and the use of freelancers, labor law issues can quickly arise, for example with regard to protection against dismissal, vacation entitlements or continued pay in the event of illness.
Tax law: Social security contributions and taxes often go hand in hand. Errors in the classification of employment relationships can lead not only to additional social security contributions, but also toadditional income and sales tax payments.
Criminal law: In the event of negligent or intentional violations of the contribution obligations, the responsible managing directors may face fines or even criminal prosecution (e.g. § 266a StGB – withholding and embezzlement of earnings).
We take all these interfaces into account to ensure comprehensive and forward-looking advice.

We have been working in these areas for many years and frequently work together in interdisciplinary teams of specialized Lawyers, Tax Advisors and Auditors. This way, we ensure that all relevant aspects – from the labor law structure to tax optimization – are incorporated into your individual solution.

Take advantage of our extensive experience and comprehensive know-how to proactively identify and avert social security risks. We will support you from the initial strategic considerations through to representation before authorities and courts – competently, efficiently and solution-oriented.

 
Conclusion

With a proactive and well-founded approach to risk management under social security law, you can secure important competitive advantages. High additional claims, fines and image damage can be avoided through clear contractual arrangements, careful selection and monitoring of external service providers, and targeted preparation for tax audits. We are a reliable partner at your side, ensuring that you can concentrate fully on your core business.

• Lawyer Marius Saager
• Lawyer Anna-Lena Rau
• Lawyer Dr. jur. Marc Fornauf
• Lawyer Markus Lüttgen