Avoiding Bogus Self-Employment: The Ultimate Guide for Freelancers and Clients

Why Bogus Self-Employment Remains a Persistent Issue

Hardly any topic moves the freelancer scene in the DACH region as persistently as bogus self-employment. Since the reform of status determination by the German Pension Insurance (DRV) at the beginning of 2025, the auditing practice has intensified – with direct effects on IT freelancers, consultants, and their clients.

The consequences of incorrect classification are serious: back payments of social security contributions, tax reassessments, and in the worst case, criminal consequences for clients. Freelancers risk losing their self-employed status.

The Current Criteria of the DRV

The German Pension Insurance examines several indicators to determine whether genuine self-employment exists:

Instructional Authority: Can the freelancer freely determine working hours, location, and method? Those who are firmly integrated into shift schedules or must use a fixed workplace at the client's premises are in a grey area.

Integration into the Company Organization: Does the freelancer use their own tools and infrastructure? Or are they integrated into internal processes, hierarchies, and communication structures like an employee?

Entrepreneurial Risk: Does the freelancer bear their own economic risk? Those who work on an hourly basis without a results orientation and do not acquire their own clients may not meet this criterion.

Duration and Scope: Long-term assignments with only one client are a strong indicator. As a rule of thumb: more than 5/6 of the turnover with a single client is critical.

Practical Measures for Freelancers

1. Maintain Multiple Clients

The most important protection: Diversify your client base. Ideally, you should demonstrably work for at least two to three different clients – even if a main project takes up most of your time.

2. Use Your Own Business Resources

Use your own laptop, your own software licenses, and work, where possible, from your own office or co-working space. Document these investments carefully.

3. Structure Contracts Correctly

Pay attention to work contract formulations: Define deliverables instead of working hours. Avoid formulations like "The contractor is obliged to be on site from 9 am to 5 pm."

4. Proactively Use the Status Determination Procedure

In case of doubt, you can apply to the DRV for a status determination procedure. This creates legal certainty for both sides – even if the result is not always as desired.

What Clients Need to Consider

Establish Compliance Processes: Large companies now have their own compliance departments for freelancer assignments. Medium-sized companies should at least use a checklist.

Involve Project Intermediaries: Collaboration through specialized intermediaries can offer additional legal certainty, as they often have their own auditing procedures.

Consider ANÜ as an Alternative: Employee leasing (Arbeitnehmerüberlassung - ANÜ) offers a legally sound alternative for certain deployment scenarios, even if it is associated with higher costs.

Conclusion

Bogus self-employment is not a bogeyman, but a manageable risk – if both sides deal with it professionally. The key lies in clean contract designs, clear project structures, and an honest assessment of whether an assignment actually meets the characteristics of freelance work.

At frelani.com, we support you with project-based tenders that are geared from the outset towards clear deliverables and genuine self-employment.