Federal Social Court: Clarification of bogus self-employment for managing directors of a one-person company
The formation of a limited liability company cannot circumvent social security obligations. The actual circumstances are decisive in assessing a person's social security status. This was decided by the Federal Social Court in three appeal proceedings (BSG v. 20.7.2023 – B 12 BA 1/23 R, B 12 R 15/21 R and B 12 BA 4/22 R).
Risks associated with postponing the termination date of employment in connection with reaching the standard retirement age
It is common for parties to an employment contract to agree that the contract will end no later than when the employee reaches the standard retirement age. If employers and employees wish to extend the contract term before the employment relationship ends due to reaching the standard retirement age, the termination date can be postponed, potentially multiple times, according to Section 41 Sentence 3 of the German Social Code, Book VI (SGB VI). It was previously unclear whether other substantive terms of the employment relationship (e.g., remuneration, working hours) could be changed simultaneously with such a fixed-term extension. Some legal scholars argue that such a change renders the fixed-term clause invalid. The Kiel Regional Labor Court followed this legal opinion in a decision dated October 14, 2021 (Case No. 4 Sa 342 öD/20).