What is bogus self-employment?
It occurs when a supposedly self-employed subcontractor is in fact used like an employee. The result: back-payment of social-security contributions and possible criminal consequences for the client.
Typical DRV criteria
- Bound by instructions and firmly integrated into the business.
- Only one client, no genuine entrepreneurial risk.
- No own equipment, working under someone else's name.
Which proof protects you?
- A1 certificate for posted (EU) workers.
- Exemption certificate under §48b EStG (construction withholding tax).
- Trade registration, own equipment and multiple clients.
How EmployGuard helps
The subcontractor module centrally manages A1, exemption certificate, Finanzamt mapping and worker documents — with expiry tracking, automatic reminders and AI document analysis, so all proof is instantly ready during audits.
FAQ
Who is liable for bogus self-employment?
Usually the client: back-payment of social-security contributions (up to 4 years, longer for intent) and possible criminal consequences.
Is the A1 certificate alone enough?
No. A1 proves social security in the home country but doesn't replace the overall assessment. Also document the exemption certificate, trade proof and genuine self-employment.
How does EmployGuard help specifically?
All relevant proof per subcontractor and worker is centrally available with deadline reminders and compliance status — ideal for DRV or customs audits.