The charge of withholding and misappropriating wages under Section 266a of the German Criminal Code (StGB) is among the most practically relevant offenses in white-collar crime. Particularly in connection with bogus self-employment, entrepreneurs, managing directors, and de facto decision-makers are the focus of investigative authorities. Company audits, status determination proceedings, or investigations by the Financial Control Unit for Undeclared Work (FKS) frequently lead to extensive criminal proceedings with considerable financial and personal risks.
This offense is particularly relevant in industries with project-based activities, subcontracting structures, or freelance employees. Frequently affected sectors include construction, IT, healthcare, and freight forwarding.
Those accused regularly face far more than just a fine. In addition to imprisonment, they risk confiscation of withheld funds, prohibition from conducting business, professional bans, and exclusion from public contracts. For companies, such proceedings can be a threat to their very existence.
Our lawyers advise and defend clients nationwide in proceedings under Section 266a of the German Criminal Code (StGB). As a law firm experienced in white-collar crime, we combine criminal defense with an in-depth understanding of business processes and compliance structures.
Section 266a of the German Criminal Code (StGB) protects the interest of social security institutions in the full and timely receipt of social security contributions. While the offense is classified as a property crime, it has significant implications for social security law. The provision distinguishes three main categories of cases:
According to paragraph 1, any employer who fails to remit employee social security contributions to the collecting agency when due is committing a criminal offense. This offense is structured as a true omission offense. The mere failure to remit the contributions when due constitutes the offense – regardless of whether the net wages were actually paid out.
Paragraph 2 covers two scenarios: firstly, the withholding of employer contributions through incorrect or incomplete information provided to the collecting agency, and secondly, the unlawful failure to inform the collecting agency. Both scenarios require aggravated conduct – that is, deliberate deception or active concealment, not merely the failure to pay.
Paragraph 3 concerns the misappropriation of such parts of the remuneration that the employer retains in trust for a specific purpose (e.g., employee savings plans, contributions to pension schemes), but does not pass them on to the third party and does not inform the employee of this without undue delay.
In practice, the focus is primarily on the withholding of employee social security contributions (Section 266a Paragraph 1 of the German Criminal Code). The mere failure to remit withheld contributions when due constitutes the offense. Actual payment of net wages is irrelevant.
An employer is someone to whom an employee is obligated to perform work and with whom the employee has a relationship of personal dependency. For classification under social security law, Section 7 Paragraph 1 of the German Social Code, Book IV (SGB IV) applies. This section determines whether a person has dependent employment, specifically within an employment relationship. Social security law does not link the obligation to pay contributions to the designation of a contractual relationship, but rather to its actual structure.
Typical indicators of dependent employment include:
The basis for calculating social security contributions is gross earnings. If no legal regulations or contractual agreements regarding the amount of remuneration can be determined, the earnings, and thus the amount of damages, are calculated by extrapolating from net to gross earnings or by estimation. Errors in the calculation can have a significant impact on the extent of the debt and the collection decision.
Employment relationships in which employees are classified as bogus self-employed are often chosen to circumvent certain labor or social security regulations. This includes, on the one hand, mandatory social security contributions. On the other hand, it can also involve regulations concerning working hours or employee participation in company decisions.
Bogus self-employment exists in almost all sectors of the economy. A common form of this is the placement of supposedly "self-employed" contractors, when in reality it is a case of temporary staffing. EU citizens are also frequently employed as bogus self-employed workers, particularly as caregivers, domestic helpers, or in the construction industry, to circumvent minimum wage regulations.
If it is determined that supposedly self-employed individuals are in fact subject to instructions, integrated into the operational process, or bill on an hourly basis, the suspicion of bogus self-employment may arise.
The status determination procedure under Section 7a of the German Social Code, Book IV (SGB IV) offers the possibility of clarifying one's social security status early and preventively. The Federal Court of Justice (BGH) has expressly pointed out that using this procedure can significantly reduce the risk of criminal prosecution.BGH Decision of 13.12.2018 – 5 StR 275/18).
In addition to criminal liability for withholding wages under Section 266a of the German Criminal Code (StGB), fines may be imposed for violations of social security reporting and contribution obligations. Frequently, however, those involved are also mistaken about the correct classification as an employee or self-employed person, which can constitute a mistake of fact negating intent.
Investigations often begin through notifications from social security institutions, audits under Section 28p of the German Social Code, Book IV, or checks by the customs' financial control of undeclared work. Furthermore, discrepancies in payroll accounting, suspicious subcontractor chains, or information from former employees can trigger an investigation.
During the investigation, business documents, payroll records, contracts, and internal communications are regularly reviewed. Searches pursuant to Sections 102 and 103 of the German Code of Criminal Procedure (StPO) are possible. The public prosecutor's office works closely with social security institutions and customs authorities.
The amount of damages is determined by extrapolating from net to gross earnings in accordance with Section 14 Paragraph 2 of the German Social Code, Book IV (SGB IV). Errors in the calculation can significantly influence the extent of the debt and the confiscation decision – and are therefore a key area of defense.
If you receive a summons or a search has taken place: Do not make any statements about the matter and contact a criminal defense lawyer immediately.
The penalty under Section 266a, paragraphs 1 and 2 of the German Criminal Code (StGB) ranges up to five years' imprisonment or a fine. In particularly serious cases – especially in cases of large-scale withholding for gross personal gain, using forged documents, or acting as part of a criminal organization – the penalty ranges from six months to ten years' imprisonment.
For defendants, the potential penalty is often far more than a fine. In addition to imprisonment, they face the threat of severe punishment. the following side effects:
Managing directors of legal entities, such as a GmbH (limited liability company), can be personally liable to prosecution under Section 266a of the German Criminal Code (StGB) in conjunction with Section 14 Paragraph 1 No. 1 of the German Criminal Code (StGB), as they exercise the employer function as legal representatives. This also applies to de facto managing directors and so-called straw man managing directors who actually exert influence on the management.
The obligation to pay employee contributions also exists in economically strained situations; self-inflicted insolvency does not usually provide relief.
In addition to criminal proceedings, fines may be imposed on the company under the Administrative Offenses Act (OWiG).
The lawyers at Galen Rechtsanwälte advise and defend clients nationwide in white-collar crime cases. We have forensic experience in complex economic proceedings and in representing individuals and companies.
Early legal advice is crucial. The sooner we are involved, the more room for maneuver there is.
Our lawyers at Galen Rechtsanwälte review the case files and examine the legal requirements. We develop a defense strategy that considers both criminal and economic aspects.
We offer personal and individual consultations. Please feel free to contact us to schedule an appointment.
Bogus self-employment exists when a contractual relationship is formally designated as self-employment, but in reality fulfills the characteristics of dependent employment as defined in Section 7 Paragraph 1 of the German Social Code, Book IV (SGB IV). The decisive factors are being subject to instructions, integration into the work organization, and a lack of entrepreneurial risk. The actual implementation of the contractual relationship is decisive, not its designation.
According to the jurisprudence of the Federal Court of Justice (BGH, decision of September 24, 2019 – 1 StR 346/18), anyone who mistakenly assumes they are not an employer and therefore fails to pay social security contributions acts without intent – this constitutes a mistake of fact under Section 16 Paragraph 1 of the German Criminal Code (StGB), which precludes criminal liability. However, this is conditional upon the individual not having considered the possibility of being an employer, even in a layperson's assessment. Whether this can be assumed in a particular case depends on the specific circumstances. Therefore, seek advice from specialized lawyers at an early stage.
As a suspect, you are not obligated to comply with a police summons. Do not make any statements regarding the matter and contact a criminal defense attorney immediately. We will provide you with prompt and discreet assistance.
Under certain conditions, Section 266a Paragraph 6 of the German Criminal Code (StGB) provides for the possibility of obtaining immunity from prosecution through timely payment of the fine. These conditions are complex and should be reviewed by a lawyer.
The limitation period is generally five years. However, the actual start of the period must be carefully determined in each individual case.
Those responsible under criminal law are the authorized representatives, in particular managing directors. De facto managing directors may also be liable.
The procedure under Section 7a of the German Social Code, Book IV (SGB IV) serves to definitively clarify social security status and can contribute to risk minimization. The Federal Court of Justice (BGH) has emphasized that initiating such a procedure is suitable for reducing the risk of criminal prosecution (BGH Decision of December 13, 2018 – 5 StR 275/18).
In serious cases, a professional ban can be imposed pursuant to Section 70 of the German Criminal Code (StGB). Furthermore, a conviction resulting in at least one year of imprisonment under Section 266a of the German Criminal Code (StGB) can lead to exclusion from appointment as a managing director of a limited liability company (GmbH) (Section 6, Paragraph 2 of the German Limited Liability Companies Act (GmbHG)).
Searches are conducted to secure evidence. Do not make any statements, tolerate the measure, and seek legal counsel immediately.
Criminal liability for aiding and abetting may arise if the perpetrator intentionally contributed to the crime. Specific responsibility always depends on the individual case.