Employees

An employee is someone who is in an employment relationship and who performs work that is dependent on the employer and the nature and extent of which are subject to the instructions of the employer, i.e. dependent work. Examples in the cultural sector include orchestra musicians and actors who are employed by an ensemble and subject to social security contributions. 

Many artists and creatives would like to work freely and independently. However, due to legal regulations or economic considerations, it may be advantageous to enter into an employment relationship instead. This has a direct impact on the obligation to obtain health, pension, accident, and unemployment insurance, for example (see Social insurance in Germany). Labour law also affords extensive rights to employed workers that are often not available (or not to the same extent) to the self-employed: they are entitled to statutory minimum leave, continued remuneration in the event of sickness or if a dependent child falls ill, protection against dismissal in some cases and many other rights.

Who is considered employed? Legal criteria have been developed to determine whether an employment relationship is subject to social security contributions. The Statusfeststellungsverfahren (procedure for determining status) can be used to check an activity, sometimes at the request of the competent Deutsche Rentenversicherung Bund (clearing house).

The following criteria are relevant in determining employment status:

• employer’s authority to give instructions regarding the times, duration, place, and nature of the activity;
• does not have own place of business or equipment; instead, integration into the enterprise;
• no authority to delegate duties to others;
• no business risk, i.e. no use of own capital;
• leave entitlement and continued remuneration;
• fixed salary, no share in revenue.

Some aspects that are relevant with regard to employment status are explained below.

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In 2015, Germany introduced a statutory minimum wage for employees. As of January 2024, the gross minimum wage is 12.41 euros per clock hour.
The long-term unemployed (who are not entitled to the minimum wage in their first six months in a new job) and volunteers are exempt from this regulation. For interns, the minimum wage only applies under certain conditions (see also Interns, job shadowing etc.; for further information, please visit the Praktikum.info website (only available in German) or the Absolventa portal (only available in German). 

The minimum wage also applies to foreign workers employed by organisations and businesses in Germany. In general, wages depend on the place of employment.

• Questions and answers on the minimum wage in Germany are provided at the webpage of the Federal Ministry of Labour and Social Affairs.
• The website of the German Trade Union Confederation provides an overview of the minimum wages in Germany and Europe (only available in German).

Note: Not all European countries have statutory minimum wages. Current data can be found, for example, on the eurostat website (only available in German).  

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There is a distinction between fixed-term/specified-purpose and open-ended employment contracts.

A fixed-term or specified-purpose employment contract ends when a certain point (in time) based on which the contract was concluded is reached. This point may be a pre-determined date or the achievement of a certain agreed objective­. In the latter case, the term of the specified-purpose employment contract shall expire no earlier than two weeks after written notification of the achievement of the agreed objective. Fixed-term/specified-purpose employment contracts must be concluded in writing so that the time limit is effective.

A time limitation enters into effect either if there is a specific reason for which it would be warranted or if the maximum period for which the contract may be concluded is two years. Specific reasons justifying the limitation of the contract term could include the need for a temporary replacement or a temporary operational or project-related need for additional workers, for example. If there is such a reason, several fixed-term contracts can be agreed in succession; this is then referred to as Kettenbefristung (repeat fixed-term employment)­. There is no time limit for the total duration of the consecutive fixed-term contracts.
If there is no specific reason necessitating a fixed-term contract, a time limit may last no more than two years. Within these two years, an employment contract may be extended for a further fixed term a maximum of three times.

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The Part-Time Work Directive 97/81/EC of 15 December 1997 introduced legislation within the EU which prohibits discrimination against part-time workers and entitles employees to reduce their working hours. Germany implemented the Directive in 2001. It stipulates that workers in companies with more than 15 employees have the right to reduce their working hours indefinitely and are entitled to request a certain distribution of their working hours throughout the week after they have worked for the company for at least six months – unless operational reasons prohibit this.

The German regulations on parental part-time work also entitle parents to fixed-term part-time work so as to allow them to reconcile work and child-rearing. People with severe disabilities are also entitled to shorter working hours due to the nature or severity of their disabilities.

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A distinction is made between marginal employment and short-term employment. There is no obligation for either persons in marginal employment or short-term employees to be insured under the statutory health insurance, long-term care insurance, and unemployment schemes. They may also be exempted from the obligation to participate in the statutory pension insurance scheme. Although the employer makes fixed payments to the health and pension insurance bodies, the employee does not receive health insurance coverage.

Low-paid employment – also known as a mini job – is defined as employment for which the monthly remuneration does not exceed 538 euros or 6456 euros a year (as of January 2024). Employees who do not have a main job requiring insurance can have several mini jobs with different employers. The compensation for each of these jobs must then be added up. If the total remuneration for all mini jobs exceeds the monthly limit of 538 euros, the work is subject to social security contributions.
If the remuneration is between 538.01 euros and 2000 euros, the activity is carried out in the so-called 'transitional area’ (Übergangsbereich, Midijob). Social security contributions are then payable, but at a reduced rate. The total contribution and the employee's contribution are calculated using certain formulas; the difference is paid by the employer. A calculator for the transitional area (Übergangsbereichsrechner) is available here (in German).
If the compensation exceeds 2000 euros, the employment no longer qualifies as marginal. 

An employer pays the social security contributions to the collection offices; in the case of marginal employment this is usually the Knappschaft-Bahn-See. The employee must inform the employer of any additional income so that he/she can perform the correct calculations, since if the remuneration for each mini job is below 520 euros but the total remuneration for all mini jobs exceeds this limit, the employment is either subject to social security contributions in the 'transitional area' or constitutes regular employment subject to standard social security contributions.

Note on payroll tax for mini jobs: The remuneration for marginal employment is always taxable. Payroll tax is usually levied as a flat tax and paid by the employer to the Minijob-Zentrale. Tax law distinguishes between a 2% uniform flat tax and a flat payroll tax of 20% (plus solidarity tax and church tax). The employee does not have to specify a mini job in his/her income tax return.

Information about this topic can be obtained from the Minijob-Zentrale (only available in German).

Employment is considered short-term employment when the activity is limited to not more than three months (five working days a week) or 70 individual working days per calendar year. The work must not be performed in a professional capacity: an activity is considered to be performed in a non-professional capacity if the work is performed in addition to a regular occupation that is subject to social security contributions or if it takes place between graduation from high school and the start of university studies or after retirement. The amount of the remuneration is irrelevant.

Since the short-term work for company C was also carried out in a professional capacity, the calculation must take into account the accompanying remuneration. This means that the artist earned 825 euros in September and again in October and 625 euros in December. This means that the artist’s income falls within the sliding zone from September onwards and is thus subject to social security contributions. 

Note on payroll tax for short-term employment: Even short-term employment is subject to taxation. Payroll tax can be levied either on the basis of individual pay-as-you-earn criteria (i.e. depending on the tax bracket) or, under certain conditions, at a flat rate of 25% (plus church tax and solidarity tax).
More information can be found on the Minijob-Zentrale website (only avilable in German).

Employees who work a mini job or short-term job are considered part-time employees. In principle, they have the same rights as full-time employees, i.e. they are entitled to take leave and receive continued remuneration in the case of illness, etc.

Detailed information on both forms of employment are available at the webpage of the Minijob-Zentrale.

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Workers who are employed for a period of less than seven days in a row (including Saturdays, Sundays and public holidays) and not always by the same employer are considered occasional workers. Occasional employment is common in radio and television stations, film production companies and theatres.
It is difficult to distinguish this type of work from self-employment. If the labour is made available for different activities and is not linked to the provision of a specific service or the creation of a specific product and if an employment contract is in place, the activity constitutes a dependent employment relationship.

In principle, occasional workers are subject to social security contributions, with the exception of unemployment insurance. One particularity applies to health insurance coverage: the membership and thus the insurance coverage of an occasional worker also continues on days when he/she is temporarily not employed - but only for a maximum of three weeks. In this case, the insurance coverage continues without payment of contributions.

Additional information can be found on the Bundesverband Schauspiel website (only avilable in German) or, for example, on the Techniker Krankenkasse website (only available in German).

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