How can I avoid pseudo self-employment?
Working with freelancers or external service providers offers small and medium-sized enterprises (SMEs) a high degree of flexibility and numerous advantages. However, companies that use of freelancers should ensure that they do not run the risk of entering into bogus self-employment because it can have both financial and legal consequences.
What is bogus self-employment?
The term bogus self-employment or false self-employment describes a situation in which a person is formally considered self-employed but is actually under the control of an employer as if they were employed. This occurs, for example, when a person is hired by a company as a labourer, but works exclusively for this company and must adhere to its rules regarding working hours and presence on site.
The problem is that bogus self-employed persons often have to abide by the employer's rules but do not benefit from the social and legal advantages of employment.
Criteria for assessing bogus self-employment
The criteria of economic dependency and the authority to issue instructions are decisive for the assessment of a situation. If a contractor earns more than 50% of their income from a single client or has less than three different clients, this person is in bogus self-employment. The designation in the contract or responsibility for social benefits are not relevant criteria. A certificate of self-employment issued by the AHV or registration with the AHV and regular payment of contributions are not sufficient criteria either.
Which consequences are there for companies?
The employment of workers in bogus self-employment can have serious legal consequences for companies. In the event of a conviction, there is a risk of fines and retrospective wage payments for up to five years. In addition, bogus self-employed workers could sue the company for violating their labour rights. Such a situation can lead to extensive scrutiny by tax, social security and labor authorities and damage the company's image among employees, customers and business partners.
What are the consequences for the employees?
A worker wrongly categorized as self-employed loses certain rights and protections that would normally be available to employees. For example, they are excluded from unemployment, accident and disability insurance. They may also have to pay higher contributions.
A person who is categorized as a bogus self-employed person has no protection in terms of paid leave, sick pay, accident, pregnancy or military service substitution and no protection against unfair dismissal.
If an employee realizes that he is in a bogus self-employment situation, they should file a complaint with the cantonal authority in order to assert their claims and receive appropriate compensation. Employees who are self-employed on a part-time basis only have to register with the compensation office and join the AHV if their gains are more than CHF 2,300 per year.
Recommendations
To avoid bogus self-employment, companies which hire external service providers should obtain a certificate of self-employment from the compensation office. It may also be advisable to conclude an employment contract or utilize the services of a payroll company. If in doubt, a lawyer or other legal expert should be consulted to avoid potential cases of bogus self-employment. Information can also be obtained from the relevant compensation offices.
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