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Pseudo self-employment

If a person is self-employed but actually works as an employee, this is known as bogus self-employment. Social security contributions and taxes can be avoided as a result. The term "bogus" self-employment is used when self-employment is only feigned.

What is bogus self-employment?

If a person is officially self-employed, but in reality works as an employee, this is called sham self-employment. Usually, the person is integrated into the organizational structure of the company, has fixed working hours and receives instructions on how to carry out the work. Although they are regarded as self-employed, they are actually employed. This can have a negative impact on social security contributions, taxes and protection against dismissal. There are clear criteria in the EU and Switzerland for identifying bogus self-employment. This includes aspects such as personal dependency, integration into the client's work organization and the absence of entrepreneurial risk. In order to avoid legal consequences, it is important to observe these criteria.

Consequences of bogus self-employment

If bogus self-employment is detected, both the self-employed person and the company can suffer serious consequences. During the period of self-employment, social security contributions and taxes should have been paid, for which the self-employed person may be required to make additional payments. The company could also be forced to pay contributions and penalties. To prevent legal disputes and financial burdens, it is important to establish a clear distinction between self-employment and dependent employment. To avoid bogus self-employment, it is important to conclude a clear and transparent contract and comply with the applicable laws.

Avoiding bogus self-employment

To avoid bogus self-employment, it is important for self-employed people and companies to ensure that the working relationship is clearly defined as self-employment. This can be achieved by clearly drafting the contract, defining the project goals and results and complying with entrepreneurial aspects such as work organization and risk. It should be checked regularly whether the working relationship meets the criteria for self-employment. Working closely with legal and tax advisors can help to avoid legal pitfalls and clearly structure the working relationship.

Legal framework

In the EU and Switzerland, there is a clear legal framework to prevent and penalize bogus self-employment. To avoid legal consequences, it is important to know and comply with the legal provisions. These include the definition of self-employment, the criteria for distinguishing dependent employment and the obligations to notify the authorities. It is important that employees and companies are aware of the applicable laws and ensure that their working relationships comply with legal requirements. Early clarification and transparency in work arrangements can help to minimize the potential risks associated with bogus self-employment.