(English) Economic forum of the SPD demands legal security in the use of free digitization experts and warns against emigration

This text is an automatic english translation of our original article about this topic:

Robert M. Maier, Vice President of the Economic Forum of the SPD e.V., Photo: Nanna Heitmann

The economic forum of the SPD demands a revision of the stronger regulation of temporary work and work contracts decided in the last legislative period.

"Independent digitization experts are essential for the digital transformation of industry and medium-sized businesses," explained Robert M. Maier, vice president of the SPD and founder and managing director of Visual Meta GmbH, a Berlin-based Internet company with 200 employees.

"The new rules make it more difficult for external experts to work in companies. Without reform, we will continue to lose ground in the global competition for the best minds. It is already evident today that IT and digitisation experts are migrating abroad and offering their specialist knowledge there."

No April joke!

When reading the above press release we had to pinch ourselves: No, we are not dreaming. And it's not an April joke either, although the announcement was published on April 1. The reason for this publication date was rather the opening of the Hanover Fair 2019 yesterday.

Frank Specht of Handelsblatt has already taken up and titled the press release of the SPD Economic Forum: "The use of freelance IT specialists is to be facilitated - the SPD would like to loosen the past regulation to work contracts and Leiharbeit again. It sees competition as being in jeopardy.

Now the SPD Economic Forum is not THE SPD, but "only" an association close to the SPD and supported by business enterprises. Also we do not agree as VGSD with all demands of the forum.

Nevertheless we are pleased naturally enormously that the forum takes up those of us again and again - last with one Studie empirically occupied - concern around the competitive ability of Germany and the danger of the migration of IT-experts. We hope that the demands of the SPD-Wirtschaftsforum contribute to the fact that the BMAS gives more weight to the topic legal security and presents appropriate solutions proposals in a timely manner.

Six-page position paper on the economic form

The demands of the trade association close to the SPD are based on a six-page position paper in which the member companies demand significantly more flexibility and legal certainty when resorting to independent IT experts. Because the economy fears risks: It is easy to get suspicious of employing bogus self-employed people if external service providers are temporarily closely involved in a project team.

The paper states that hiring experts is not a solution either: "Freelancers often depend on their status and have oriented their lives towards self-employment. They therefore usually reject lucrative offers of a permanent position, also because they can demand significantly higher daily rates as freelancers in times of a shortage of specialists.

Forum calls for inclusion of self-employed persons (groups) in statutory social insurance branches

In order to remedy this situation, the member companies advocate, among other things, the inclusion of individual self-employed groups in the statutory social insurance system.

Barbara Loth is quoted in the press release (no further details can be found in the position paper, see below). She is head of the Fachforum Arbeitswelt, Tarifpartnerschaft und Integration des Wirtschaftsforums: "Exceptions with positive criteria could be introduced for external digitisation experts with a certain level of income. If appropriate retirement provisions could be proven, the interest of the solidarity community in social insurance coverage would be met and thus the legally secure deployment for the companies would be possible.

The position paper under the magnifying glass

The starting point of the position paper is the growing importance of agile methods and their importance for the competitiveness of the German economy. First, it explains what "agile methods" (1.) and what "external methods" (2.) are.

Then the authors present the problems resulting from legal uncertainty (3.): The classical criteria of the German Pension Insurance (DRV) for the integration into operational procedures and thus for bogus self-employment did not consider the constraints and peculiarities of agile methods.

For agile methods typical circumstances would be evaluated therefore by the DRV as indications for fictitious self-employment, e.g.

divided work interaction with internal employees,
Activities that are also performed by internal employees,
Activity at the client's premises,
Access to the customer's systems and equipment as well as
Duration and extent of the activity that are significant.

Under 4. the paper summarises the extensive sanctions if an agile project is assessed as integration.

Legal uncertainty leads to strict compliance guidelines that hinder IT projects in Germany

The consequences of the legal uncertainty (5.) are very strict internal compliance requirements in the companies in order to reliably prevent the integration and thus pseudo self-employment of external employees. As a consequence, however, internal employees could not work as closely with external employees as would be necessary for the success of the project:

Some companies had banned mixed teams or introduced extensive guidelines that had to be observed when working together. "Still other companies have even abandoned the use of agile methods with external partners for some projects or have relocated such activities abroad.

Successful digitalization of Germany at risk

The lack of know-how transfer from external to internal employees impairs "the development of the product and that of the employees. IT projects cannot be completed or can only be completed with a delay." However, this is decisive for the international competitiveness of companies and successful digitization in Germany. In addition, the high innovation potential of external companies, which is of utmost importance for companies, cannot be fully exploited.

No alternatives to the use of the self-employed, ANÜ unsuitable

Under 7. the authors discuss possible alternatives and then reject them: Neither employment nor the temporary employment agency (ANÜ) would be suitable alternatives. Also, agile projects could not be carried out in the form of a contract for work, because success could not be defined in advance. This is explained by a tabular comparison of the characteristics of a work contract with those of an agile methodology.

The authors explain in detail why the implementation of status determination procedures does not offer a solution. They often lead to inappropriate results, a review before the social courts takes many years, and in addition, a separate procedure must be initiated for each contractual relationship.

Actually it is necessary that the status of the independent ones is examined first and the procedure in a triangle constellation with a mediator can be initiated also directly by the client. However, all this is not possible with the DRV.

Suggestions of the Economic Forum for More Legal Certainty

The solutions proposed by the Forum are reproduced verbatim in the following (emphasis by us):

"Legal adaptations and introduction of exemptions with
Positive criteria, e.g. income level and proof of adequate old-age provision. Legal certainty could be created above all by fixed income limits. Restricting the applicability of Book IV of the German Social Code (SGB IV) by means of exemption limits (income level) is a procedure that already exists for statutory health insurance (SGB V).
Harmonisation of legal regulations in various areas of law and the associated test criteria.
Inclusion of self-employed persons in the statutory social insurance branches and ensuring impunity (§266a StGB - this would fulfil the interest of the solidarity community in securing social insurance).
Modernization of the status determination procedure:
- Recognition of income level and adequate retirement provision as weighty Indicators
- The weighing process and the weighting of individual indicators must be examined for their suitability in the context of agile methods
- The procedure is designed in the form of a "forward notice" (based on key criteria such as income level and adequate pension provision)
- Acceleration of the process
- Creation of clear instructions for action by the DRV (guidelines, etc.) with regard to the special features of agile methods
- Expanding the possibilities to carry out a status assessment procedure (extension to triangular constellations).
consideration of agile working methods in the training of auditors
competent authorities.
Change of the authority-internal technical instructions/guidelines regarding the AÜG:
Exception for IT consultants/agile methods; also binding for customs and DRV.
Successive further development of existing test procedures at the invitation of the Federal Ministry of Labour and Social Affairs with the participation of the social insurance institutions, the tax authorities and the business community , for example by developing a positive catalogue of test criteria". To the position paper

Absolute income levels as a criterion?

We have highlighted the two criteria of fee amount and existence of a retirement provision, the demand for a "forward decision" and the participation of the affected parties above, because they are also central demands of the VGSD and the two criteria of fee amount and retirement provision are mentioned several times.

However, we regard absolute (monthly or annual) income limits as problematic because they are not a solution for self-employed persons with several clients, for part-time self-employed persons and self-employed persons with lower fees (e.g. just below the amount limit).

From our point of view, more emphasis should be placed on hourly and daily rates. These should be significantly higher, and in no case lower, than for employees with comparable work experience and activities. In addition, clients can only assume responsibility for their assignments and not for the total income of a self-employed person.

Absolute income levels could quickly provide more security for IT self-employed and other well-paid professions, which we would welcome. This must not, however, lead to a situation in which poorly paid or part-time self-employed workers continue to be exposed to great uncertainty. There must also be an appropriate solution for you in good time!

What is the economic forum of the SPD?

So far we had to do with the VGSD above all with the AGS, thus the working group of the independent ones in the SPD. It is a party-internal organization, to which all independent ones belong automatically in the SPD.

The economic forum of the SPD is according to own description an independent business professional association and has no financial, personnel or structural connections to a political party as independently registered association. As economic forum of the SPD registered association it organizes primarily the exchange with the social-democratic responsible persons in parliaments, governments and party divisions in federation, countries and Europe.

The federation is still quite young. It was only founded in February 2015 - on the initiative of Dr Michael Frenzel, former Chairman of TUI's Executive Board. The Forum currently has almost 400 members from all sectors, including private individuals, companies and associations. The members are involved in a total of 13 different specialist forums. They have set themselves the goal of promoting and further developing the social market economy and see sustainable economic success as the result of the interaction of economic and social progress.