Construction workers as bogus self-employed persons – retroactive payment of social security contributions

Oct 30, 2025

The Hessian Regional Social Court (LSG) had to decide in three cases whether construction workers
could work as self-employed contractors or whether their activities should be classified as pseudo-self-employment, with the consequence that they would be subject to social security contributions.

In one case, the pension insurance fund had classified the activities as subject to social security contributions in a status determination procedure; in two cases, this was the result of company audits.

The construction workers in question worked on the contractors' construction sites, performing simple tasks such as demolition work, paving, drywall installation, etc. They were paid an hourly wage of €10–15 and worked as part of the company, following instructions; they did not have their own materials or essential tools. There were no written contracts with the construction workers, and the workers did not project any entrepreneurial image. At best, they had rudimentary knowledge of German.

In all three rulings, the LSG decided that the construction workers were not self-employed, but rather pseudo-self-employed. There were characteristics of dependent employment, such as integration into the construction company's operations, being bound by instructions, no own operating resources, and simple, typical employee tasks. The court saw no evidence of genuine contracts for work or entrepreneurial activity. Even if self-employment was “agreed,” this is irrelevant under social security law if the actual circumstances indicate an employment relationship.

The construction companies must now pay social security contributions, in some cases amounting to five-figure sums. An appeal was not allowed.

Source: LSG Hessen, judgment of April 3, 2025 – Ref. L 8 BA 4/22; L 8 BA 62/22; L 8 BA 64/21