Illegal work

Illicit employment

Example case
Dona Victoria travelled to Germany from a village near Cluj (Romania). The job offer Florin made her was worth the long journey: Work with papers in a meat factory in Germany, organised travel, accommodation with the employer and, last but not least, € 1,200 per month in cash. On site it turned out that she will work for a large meat producer whose canned meat is even sold in Romania.

Florin met her in her home village, where he was looking for workers through her parish. In Germany, Florin gave Dona Victoria her work card, showed her the accommodation and explained the work. It was also he who always handed Dona Victoria the wages in cash in an envelope at the end of the month. However, Dona Victoria did not receive a written employment contract. Nor does she ever get pay slips or other documents from Florin. She does not know if she is insured and can see a doctor. She asked Florin about the contract and health insurance, but he did not respond. She wonders if she is legally employed.

1. Employer

In Germany, the employer is obliged to confirm the employment conditions of the employee (including remuneration, working hours, duration of the contract, etc.) in writing. This is usually done in an employment contract. The employer has one month from the start of work to do this.

Usually all employees receive a written employment contract. The fact that Dona Victoria did not get it does not mean she is illegally employed. Whether a job is legal or not depends on whether the employer has registered it for social security and pays social security contributions. The social security contributions must be deducted from the gross amount of the wages.

Calculation of social security contributions:
€ 1,200 net = approx. € 1,650.63 gross Florin should pay the social security contributions of the gross amount € 1,650.63.

An employment relationship without a written employment contract is not typical and could be a sign that Florin has not properly reported her to social security. Nor is it forbidden in itself that he pays her the wages in cash. However, it rarely occurs in practice and could also be a sign of illegal work for Dona Victoria.

To clarify the situation, Dona Victoria should ask Florin to give her the written employment contract. She should also ask him for the registration certificate for social insurance. The employer must register her for social security with the first wage payment, but no later than six weeks after starting work.

Dona Victoria can find an example of such a certificate under Annex XIV PDF, 270 KB, not barrier-free

The notification for social insurance takes place in Germany via the health insurance company. Florin has to report all insurance-relevant data from Dona Victoria to the health insurance company. If she has never worked in Germany, Florin has to ask Dona which health insurance company she wants to be insured with. When foreign workers take up work in Germany for the first time, their employers often choose the health insurance for them without asking. This is not correct, but often happens. In this case, Florin would have to tell Dona Victoria which health insurance company he insured her with.

2. Health insurance

After registering, the health insurance company will send Dona Victoria the insurance card with which she can go to the doctor. If she does not receive an insurance card, although she has chosen an insurance, she can contact the health insurance company and ask whether she has actually been registered. She can get this information by phone or in person. An Advice centre for migrants can help clarify this question:

https://www.eu-gleichbehandlungsstelle.de/eugs-en/eu-citizens/searching-for-an-advice-centre

If Dona Victoria was not insured by Florin, she has to choose a health insurance for herself. It is sufficient that she informs the health insurance company that she has taken up employment that is subject to social security contributions.

The list of all health insurance companies can be found among others on this website:

https://www.krankenkassen.de/gesetzliche-krankenkassen/krankenkassen-liste/

The offers of the health insurance companies are different. The companies have various bonus programs and additional services. They also differ in the forms of advice (in person on site, by telephone, by email). Some health insurance companies offer advice in different foreign languages. Dona Victoria cannot simply change the health insurance company she joins at any time. For this reason, she should thoroughly inform herself about the offer before choosing her health insurance company. Advice centres for migrants can support her in this

Dona Victoria has to inform Florin about the choice of her health insurance company. If Florin does not pay the social security contributions with the chosen health insurance company, the health insurance company will ask Florin for them. If Dona Victoria can prove that she has an employment relationship with Florin, the gap in health insurance must be closed by the health insurance company. She should therefore give the health insurance company information about her employment, especially when she started work, how much salary she received and submit evidence of this.

3. Subcontracting

If Dona Victoria, after consulting Florin and the health insurance company, finds that Florin has not paid any social security contributions for her, she can contact the canned meat producer where she does the work.

In Germany, workers in the meat processing, construction and parcel and courier sectors are protected if the employer has not paid any social security contributions. Although the meat factory is not Dona Victoria’s direct employer, it will have to pay social security contributions if Florin fails to do so. As a client of Florin, it is legally obligated to do so (the so-called subcontractor liability).

Dona Victoria can turn to a trade union advice centre for foreign workers. There she can get support to ask the factory to pay the social security contributions.

Specific employment law Advice centres:

https://bema.berlin/en/

https://www.arbeitundleben.de/arbeitsfelder/beratungsnetzwerk

https://www.faire-mobilitaet.de/en

na Victoria can find an overview of all Advice centres according to subject as well as by language at:

https://www.eu-gleichbehandlungsstelle.de/eugs-en/eu-citizens/searching-for-an-advice-centre

The factory should then pay the social security contributions itself or influence Florin so that he pays the outstanding contributions. The factory is not liable, however, if Florin can prove that he has properly registered his workers for social insurance. This document is called the clearance certificate. In that case, however, Florin still has to pay the contributions himself. There is no subcontractor liability for social security contributions for workers in many industries (apart from meat processing, construction and the parcel and courier industries). It is best to ask your employer to pay your social security contributions with the help of a lawyer.

4. Tax Office (Finanzamt)

Florin is also obligated to register Dona Victoria with the Tax Office and to pay the wage tax for her. Dona Victoria can ask the Tax Office responsible whether she has been registered. If it turns out that the employer has failed to do this, the wage tax must be paid later. For this, Dona Victoria and Florin are jointly liable. The Tax Office can decide from whom it demands the subsequent payment of wage tax . Dona Victoria did not know that Florin did not report the wage tax. Under such circumstances the Tax Office will normally ask Florin for the income tax first. The assessment basis for the wage tax due is the gross wage of € 1,650.63 (calculated on the basis of the net wage payment of € 1,200.00).

5. Financial control of illegal employment (FKS)

The Financial control of illegal employment is an authority that controls employers and, among other things, checks whether they are correctly paying the social security contributions for the employees. The FKS in the region in which Florin has registered his company is responsible for examining the case of Dona Victoria.

Dona Victoria does not know where Florin’s company is registered, so she should contact the FKS at her place of work. She can find the address on the Internet:

https://www.zoll.de/EN/Contact/Enquiries/General-enquiries/general-enquiries_node.html

Dona Victoria can contact the FKS personally, file a complaint and make a statement. If that is not possible, she can also submit a message online:

https://www.zoll.de/EN/Contact/Enquiries/General-enquiries/general-enquiries_node.html

For efficient review and processing of the case, the FKS needs as much information as possible. Therefore, Dona Victoria should provide information about the duration of the employment relationship, the daily working hours, the amounts received, witnesses, etc.

The claim of Dona Victoria can lead to the Financial control of illegal employment (FKS) checking and determining the situation. Florin can then be punished with a fine or even imprisonment for tax and social security fraud. This can also prevent Florin from employing people illegally again in the future. Since Florin evaded the social security contributions without Dona Victoria knowing about it, she does not have to be worried about being charged too with helping social security fraud. Unfortunately, after the complaint, Dona Victoria did not receive any further information on the results of the investigation.

In principle, Dona Victoria should not suffer any disadvantages from the fact that Florin has not paid her social security contributions. The gaps in all branches of social insurance (pension, health, long-term care, unemployment and accident insurance) must be closed by the respective insurance company after the events become known. The insurance cover remains in full.