NEWSLETTER 08-2016: FIGHTING SOCIAL FRAUD – LIABILITY CONSEQUENCES FOR GENERAL CONTRACTORS/CLIENTS
On January 1, 2016, the so-called Social Fraud Combating Act (SBBG) came into force. This law serves to better combat social fraud in the future.
If certain requirements are met, companies can be identified as fictitious companies. In practice, these will usually be companies at the end of the subcontractor chain. The determination of a company as a sham company can result in its client being liable for the wages and social security contributions of the sham company’s employees.
The newsletter is intended to provide an overview of the potential liability risks and also the options for avoiding liability.
The Federal Act to Improve Combating Social Fraud (Social Fraud Combating Act – SBBG) came into force on January 1, 2016. The SBBG aims to strengthen the defense, prevention and prosecution of social fraud and establishes new liability provisions for clients of subcontractors.
