{"id":1147,"date":"2026-04-13T15:58:27","date_gmt":"2026-04-13T13:58:27","guid":{"rendered":"https:\/\/galen.de\/?page_id=1147"},"modified":"2026-05-12T12:50:14","modified_gmt":"2026-05-12T10:50:14","slug":"withheld-wages-bogus-self-employment","status":"publish","type":"page","link":"https:\/\/galen.de\/en\/rechtsgebiete\/wirtschaftsstrafrecht\/arbeitsstrafrecht\/vorenthalten-arbeitsentgelt-scheinselbststaendigkeit\/","title":{"rendered":"Allegations of bogus self-employment and withholding and misappropriating wages (\u00a7 266a StGB)"},"content":{"rendered":"
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Criminal risks for entrepreneurs and managing directors in the case of withholding wages<\/h2>

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.<\/span><\/p>

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.<\/span><\/p>

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.<\/span><\/p>

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.<\/span><\/p>

What does withholding and misappropriating wages mean?<\/h2>

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: <\/span><\/p>

Paragraph 1 \u2013 Withholding of employee contributions:<\/h3>

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 \u2013 regardless of whether the net wages were actually paid out.<\/span><\/p>

Paragraph 2 \u2013 Withholding employer contributions through deception:<\/h3>

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 \u2013 that is, deliberate deception or active concealment, not merely the failure to pay.\u00a0<\/span><\/p>

Paragraph 3 \u2013 Embezzlement of wages:<\/h3>

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.<\/span><\/p>

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.<\/span><\/p>

Section 266a of the German Criminal Code \u2013 Overview of the elements of the offense<\/h2>

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. <\/span><\/p>

Typical indicators of dependent employment include:<\/b><\/p>