If a freelancer is later classified as an employee, this does not automatically mean that the entire fee paid becomes wages.

In many cases, only the customary compensation paid to a comparable employee is owed – and that is often significantly lower than the agreed-upon fee.

A psychologist with a master’s degree worked as a purportedly independent consultant for €75 per hour and received approximately €59,000 plus sales tax. After an investigation, it was determined that an employment relationship did in fact exist. The employer had apparently not anticipated this. The
employer, acting wisely, then demanded the return of a portion of the fees paid to date – with success.

The court clarified that the agreed-upon fee for a self-employed person is not automatically the benchmark for wages. Fees for the self-employed include premiums for risks that employees do not bear, according to our local Regional Labor Court
of Berlin-Brandenburg.

The standard employee compensation is deemed to be owed—and nothing more. This resulted in a claim for reimbursement in favor of the employer in the amount of €20,609.64. The difference between this amount and the fee paid can generally be reclaimed.

Caution Regarding Value-Added Tax:
In principle, value-added tax can also be reclaimed.
In the case in question, however, this failed because the statute of limitations for taxes had already expired for a previous year—the employee could no longer recover the amount from the tax office.

Tip: Act quickly regarding value-added tax, or else the right to reclaim the amount will be lost.

Conclusion: If a supposedly freelance arrangement is subsequently classified as an employment relationship, this does not automatically mean for employers that the originally paid—often significantly higher—freelance fee is considered wages. Rather, the decisive factor is the customary compensation for comparable employees.

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