Social insurance obligation for teachers – transitional rule creates clarity

Teachers and lecturers are often hired on a self-employed basis. This practice makes the German pension insurance fund sit up and take notice. It is increasingly checking the social security status of freelancers and demanding payment of social security contributions from the clients, often music and adult education centers. The social courts have repeatedly ruled in their favor.

The practice after the “Herrenberg ruling”

The “Herrenberg ruling” by the Federal Social Court (BSG) on June 28, 2022(B 12 R 3/20 R) set the course in social law case law. A music teacher worked on a fee basis for a music school. She taught in designated rooms and was involved in the organizational processes of the music school. The BSG considered the activity to be a dependent employment relationship despite the contractual agreement of self-employment. In the opinion of the BSG, the essential characteristics of an employment relationship subject to social insurance contributions were: the obligation to personally perform work, fixed lesson times and rooms, the lack of entrepreneurial options and the obligation to participate in school events.

For companies in the education sector, this ruling has so far resulted in one thing in particular: teachers are generally already considered to be employees subject to social security contributions and not self-employed if they are integrated into the work organization and follow the instructions of the company. This means that companies have to pay social security contributions for their freelance staff, which can mean a considerable financial burden for them.

In response to the “Herrenberg ruling”, the leading social insurance organizations discussed the assessment of teachers and lecturers under insurance law on 4 May 2023 and defined more precise assessment standards. However, the legal uncertainty remained. Since then, providers of educational institutions have had to continue to expect additional claims from social insurance providers due to bogus self-employment; a not inconsiderable financial risk.

Transitional arrangement at the “last minute”

A transitional regulation for teaching activities in Section 127 SGB IV, which was passed as part of one of the last legislative amendments by the last Bundestag and has been in force since March 1, 2025, should now provide legal clarity – at least for the time being.

The main content of this transitional provision is as follows: Even if the status is determined differently by an insurance provider, there is no obligation to pay insurance and contributions until December 31, 2026, provided that the parties to the contract

1. have unanimously assumed self-employment and
2. the person carrying out the teaching activity agrees to this.

The parties therefore have until the end of 2026 to convert the employment relationship. Even if no status determination decision has yet been issued, the parties are protected until the deadline.

Educational institutions get time for adjustments

The transitional regulation of Section 127 SGB IV is to be welcomed, as schools now have planning security until December 31, 2026 and are protected from claims for back payments by social insurance institutions. The legislator’s aim was to give educational institutions and teachers sufficient time to make the necessary adjustments to their organizational and business models so that teaching activities can continue to be carried out both in dependent employment and on a self-employed basis even under the changed framework conditions.

The transitional regulation is still subject to interpretation

As concise as the provisions of Section 127 SGB IV are, they are still open to interpretation. For example, it is not clear from the wording to whom the teacher must declare their consent. According to the legislative materials, the addressee of the declaration is either the insurance provider (if a status determination procedure has been carried out) or the educational institution (if no status determination procedure has been carried out). It is also unclear what the object of the consent must be – the conformity of the contractual situation and the actual contractual relationship or the waiver of the social insurance obligation. The legislator fails to provide a clear definition at this point.

Educational institutions should review the requirements of Section 127 SGB IV

Educational institutions and schools are therefore strongly advised to use the transition period to review existing contractual relationships and to ensure that they are legally compliant for the period from January 1, 2027. In particular, they should also check the requirements of Section 127 SGB IV. They should be sure that the work is teaching and that the teacher has agreed that no social security contributions will be paid. The insurance providers are likely to pay particular attention to checking these cases. It is therefore advisable to document the fee-based teacher’s consent in writing in order to provide evidence. At the same time, they should examine the individual circumstances of the specific case and keep an eye on the case law on status assessment, as clarifications from the legislator or case law can be expected. This is particularly important because the coalition parties have also committed themselves in the current coalition agreement to addressing the status assessment procedure in the new legislative period and making it faster, more legally secure and more transparent, for example by introducing a fictitious approval.