A Chronological Classification- AÜG Amendment 2017
IT Freelancer Magazine: Ms. Brunner, in recent years, new models have appeared on the market in addition to the classic service contract, which attempt to cushion the legal uncertainties and gray areas of the independent service contract and thus the possible risks of self-employment. How do you see this issue?
Barbara Brunner: Perhaps first of all, in order to work through the issue chronologically, a few words on the legal classification:
2017, the year of the AÜG amendment, was an initial point for many of our clients, but also for many contractors, to deal even more intensively with the topic of self-employment and thus also with their own compliance.
In the course of the AÜG amendment, new considerations arose on the market to replace the classic service contract and thus avoid the risk of possible bogus self-employment. Here, for example, there were efforts by individual companies to carry out projects only in the course of employee leasing, or to handle projects of any kind via contracts for work and services.
Basic knowledge: Employee leasing
IT Freelancer Magazine: What does something like this look like in concrete terms (e.g. contractually)?
Barbara Brunner: Let me put it this way: All these models have their justification on the market side by side, and yet they cannot be used arbitrarily.
Employee leasing, for example, is a special type of triangular relationship. A worker employed by a temporary employment agency is hired out to a clientsby means of a temporary employment contract.
The employee then performs at the clientsin an integrated manner bound by instructions and thus acts like an internal employee of the clients.
This is exactly the difference to the independent service contract, which requires a service free of instructions and not integrated.
However, temporary employment is also subject to special regulations, such as the so-called maximum period of temporary employment, which is usually 18 months, or the so-called equal pay, which provides for a gradual equalization of pay with internal employees of the clients.
Thus, employee leasing also presents companies with challenges in implementing it in compliance with the law.
Temporary employment or self-employment? Reasons for decision
IT Freelancer Magazine: Who is more likely to opt for temporary employment, who for self-employment? Is it possible to classify this?
Barbara Brunner: A key aspect here is certainly the motivation or motive behind how one envisions one’s professional activity. While young graduates, for example, often still have a greater need for security and may also want to be developed further by a service provider in order to possibly find “the” job for life, the motivation to work as a freelancer is more pronounced, for example, among people who like to work flexibly in terms of time and region. Here again, the need for security is a decisive aspect, but in exactly the opposite direction. Many freelancers enjoy changing clients, different project assignments, and different clientsover relatively short periods of time. The need for security is certainly a little less pronounced among this group of people.
Nevertheless, the decisive factor for the classification of an activity is and remains, of course, not the will or motivation of the person performing it or the clients, but the content of the task.
While, for example, line and/or assistant activities, which are carried out under strict instructions, can only be performed by temporary staffing, there are also activities for which it is essential to work without instructions. This is exactly where the challenge lies to precisely distinguish these activities from each other and to choose the right type of contract for the respective project.
The rule-compliant design of independent projects is the decisive factor
IT Freelancer Magazine: Ms. Brunner, how do you see the demarcation? Is the self-employed service contract thus more risky in its execution because of the risk of bogus self-employment?
Barbara Brunner: To start with: It’s about the economically and legally sensible coexistence of the various forms of assignment and employment, and not about the substitution of models. In our opinion, the independent service contract continues to have its justification in the market and its permanent place in the modern working world. It is only a question of the right “how”, i.e. the rule-compliant design of independent projects:
In this context, it is important to properly define topics such as working without instructions and avoiding integration into the work organization of the clients, to fix them in the contract and then to live them in the actual implementation during the project assignment.
In addition, we have made the experience that many contractors, once they have decided to become self-employed, do not want to switch to a permanent position at all, but have explicitly chosen this model. Ultimately, it can be said that it is a kind of life decision whether to opt for free enterprise or for a permanent position, which is usually more long-term. As an entrepreneur, I need to actively address the opportunities and risks of this model in equal measure. We see that most freelancers have been doing this very actively in recent years.
At Hays, for example, we started an exchange format last year with our business partners (self-employed) around the topic of compliant sourcing, where we share best practices from many thousands of project assignments over the past years and actively engage with the self-employed on this topic. The format has been very well received and this also shows us the interest and the increasing professionalization of contractors on this important topic. Many actively seek to maintain their independent status.
IT Freelancer Magazine: What can you do as an IT freelancer to position yourself visibly in the market as a self-employed person?
Barbara Brunner: For this, the self-employed should first of all have their own infrastructure that makes their independence visible to the outside world and that is necessary for the implementation of projects. This includes, for example, own office equipment, or office space and a good appearance as a self-employed person on the market and much more. Many contractors are now visibly positioning themselves in the market as self-employed, thus building a professional network of relationships. In this way, project-free periods can be minimized or even avoided altogether, and at the same time one is also actively perceived as an entrepreneur on the market.
IT Freelancer Magazine: Is there also something that needs to be considered on the client side?
Barbara Brunner: The clientsmust also be sensitized to the topic and decide precisely which project can be carried out with which form of contract. For the independent service contract, a service description must then be drawn up for the project. This should describe the tasks so precisely that the self-employed person knows without further information what his tasks are in the project. The service description must not be so detailed that it itself implies instructions, nor must the service description be so abstract and general that the self-employed person is then compelled to receive instructions in the project.
In conclusion, we can say that the project design according to the rules and the positioning of the self-employed in the market is, in our opinion, the key to the successful implementation of a project for IT self-employed.
About Barbara Brunner:
Barbara Brunner completed her law studies at the Universities of Erlangen and Lausanne (French-speaking Switzerland). After her studies, she started at an international software company in Nuremberg and later moved to a medium-sized personnel service provider, where she took over the management of the legal and personnel department after some time. Since 2017, she has been working for Hays AG in the Compliant Sourcing department, where she is currently an Expert Compliant Sourcing, responsible for the topic of rule-compliant structuring of service and work contracts, especially on the contractor side.