Freelancing consultants face several challenges, among others disguised employment. In general, disguised employment might arise, if a self-employed contractor should be classified as an employee with the rights and duties legally regulated.
The consequences of working effectively as an employee, are not harmless, quite the opposite. Consultant, client and intermediary must pay taxes on wages, social insurance and a fine. In case of deliberate disguised employment, a criminal offence is in place and higher fines need to be paid or even a deprivation of liberity for reoffender will follow.
YOU COULD ENDANGER DISGUISED EMPLOYMENT, IF THE CONSULTANT
- is incorporated into the business, e. g. own personal file, own e-mail address of the firm without external labeling or own business card from the client
- is bounded by instructions regarding place and time of work
- is assigned to tasks that were/will be fulfilled by former employees
- is refunded like an employee: fixed income, overtime compensation, continued payment in case of illness, voluntary social contribution by the company like staff discount and subsidies for food
- has no capital investment: the client offers a personal computer, smartphone, a company vehicel, …
- owes working power, not an achievement
- stems more than 80 % of the income from one client
- doesn’t behave entrepreneurial
The more criteria are fulfilled, the higher is the risk of being in a disguised employment!
- Check the above-mentioned criteria BEFORE acceptance of the order
- Acquisition of projects on your own or with the help of personnel service providers
- Perform at own expenses and in your own name as a consultant
- Make own advertising efforts as a consultant (demonstrate your presence on the market via Social Media (Xing/Linkedin) and your own homepage, own business cards and letter paper, …)
- Proof annual training and capital investment as a consultant, e. g. purchase of an own personal computer
ARCORO HELPS YOU
arcoro advises you around the topic of freelancing consultants in companies. We help you to avoid disguised employment!
You can directly contact me for further questions:
+49 89 26 20 994-11