A company works with a freelancer for cost beneficial reasons and to take advantage of greater flexibility in regard to the German employment law.
The company is the freelancer's only client and contractual conditionshow that the freelancer is subject to hourly pay. The contract also requires the freelancer to deliver the service personally. While working for the company the freelancer also uses the equipment & materials of the employing company.
Looking at the given situation the German authorities considered the freelancer as a regular employee of the company.
For this reason the employing company requested a change in the status of the freelancer, from freelance to regular employee. This change in status involves several risks for the employing company in respect of German employment law:
We provided advice and support throughout the full process of changing the contractual status from freelance to employment.
Counselhouse's legal advisors negotiated with the German tax authorities and the social security administration on behalf of the employing company in order to prevent further negative impact for the ongoing business operation in Germany.
When managing an employment relationship in Germany it is most important to consider local compliances, as well as meeting German governance standards. Our professional advisory services can help you to minimize the risks involved when employing and managing human resources in Germany.