Pseudo self-employment: Is the new law the remedy?

A new social security assignment law (SV ZG) designed to increase legal certainty regarding pseudo self-employment has gone into effect across Austria in July 2017.

The Austrian national health insurance funds will now hold a joint review in an attempt to clarify whether an individual subject to compulsory insurance should be classified as employed or self-employed. The funds currently suspect 1,644 cases of pseudo self-employment nationwide.

When a person now becomes self-employed, a preliminary review in the form of a questionnaire will screen if the individual truly qualifies as such. The GKK, SVA and SVB insurance funds will evaluate the data and, if the results are not unanimous, will send a notification with a mandate for further investigation.

Reclassifications are only possible if false statements were made by the insured party or the tax office and GKK has determined that an individual is incorrectly insured during an audit of wage records.

Critics of the new law question:

• The form of the preliminary review (incomplete or false entries in the questionnaire)
• The lack of binding deadlines
• In the case of a new classification, problems in rescinding sales tax
• The remaining risk of a slowly evolving employment relationship