New Self-Employment

What the proposed legislation could mean for interim managers

Anyone working as a freelancer or interim manager will be familiar with the particular dynamics of project work: for a few months, you become part of a team, attend meetings, work with internal systems and coordinate closely with those responsible within the company. At the same time, you remain self-employed and carry out the project as an external expert.

However, precisely this close relationship with the client can raise questions about your status under social security law. This is because, to date, factors such as being subject to instructions and being integrated into the client’s organisational structure have played an important role in distinguishing self-employment from employment.

A ministerial draft bill published by the Federal Ministry of Labour and Social Affairs (BMAS) on 26 March 2026 seeks to create new options in this area. The proposal envisages an additional form of self-employment under social security law – so-called “new self-employment”. What does this involve, and what could it change for freelancers and interim managers? Paul Stemmer, Consultant for Interim Management at Robert Walters in Frankfurt, puts the key points into perspective.

Why is change being proposed?

Companies specifically turn to highly qualified external specialists for particular tasks and complex undertakings. These include, for example, AI projects such as the introduction of multi-agent systems or AI governance. External expertise is also used for compliance projects, such as BaFin follow-up inspections and the implementation of regulatory requirements. The same applies to IT transformations such as ERP implementations, process optimisation and projects to ensure data quality.

Close collaboration is often difficult to avoid in these situations. An IT freelancer working on a system implementation for several months, for example, needs to coordinate with internal teams, access certain systems and attend joint meetings.

What does “new self-employment” mean?

The draft bill provides for an additional way of classifying an activity as self-employed under social security law.

The key difference is that certain aspects of collaboration that have so far played an important role in determining status – particularly being subject to instructions and integration into the client’s organisation – would no longer carry the same decisive weight under this model.

This is precisely where a major uncertainty for companies currently lies: the more closely a freelancer is involved in internal processes or works with the client’s teams, the more likely it is that questions may arise as to whether the activity is genuinely self-employed or potentially constitutes false self-employment, or employment under social security law. For companies and freelancers, such a classification can have significant consequences under employment, tax and social security law.

The proposed “new self-employment” is intended to create an additional legal framework for certain arrangements. Put simply, this could make it easier for freelancers to work closely with a client’s team while remaining self-employed, provided that the statutory requirements are met.

“This is an important point for freelancers,” says Stemmer. “After all, working closely with a client does not automatically mean that someone is not operating as an entrepreneur. Many interim professionals have been running their own businesses for years, contributing their expertise to different companies while still taking on a very active role in a project for a few months.”

What requirements are planned?

“New self-employment” would not automatically apply to every freelancer. The draft makes it subject to various conditions.

First, the client and the contractor must agree when entering into the contract that the work is to be carried out on a self-employed basis. In addition, the activity must display several characteristics of entrepreneurial activity. These include:

• A contractual right to appoint a substitute
• Multiple clients
• Opportunities for profit and risks of loss borne by the contractor
• Business expenses typical of an entrepreneurial activity
• An active promotional presence in the market

A direct transition from permanent employment to “new self-employment” with the same company is also to be prevented: under the current draft, there must have been no employment relationship with the same client during the preceding six months.

“The idea behind this is understandable: the new provision is intended to make genuine self-employment easier, rather than allowing an existing employment relationship simply to continue under a different name,” explains Stemmer. “For experienced freelancers and interim managers who operate independently in the market and contribute their expertise to companies on a project basis, this distinction creates an important framework.”

A reporting obligation is also envisaged: A reporting obligation is also envisaged: the client would be required to report the activity to the responsible collection agency as part of the social security reporting procedure within six weeks of its commencement. This is intended to ensure that new self-employment follows clear formal rules and does not rest solely on an agreement between the freelancer and the client.

This is likely to bring lasting changes to the project market. Alongside specialist expertise, it will become increasingly important which service providers (interim management recruitment consultancies) companies can use to engage external specialists in their projects in a compliant manner. Sound expertise and robust processes are therefore becoming more important, particularly where complex regulatory requirements are involved. “Smaller recruitment boutiques, in particular, cannot always meet these requirements to a sufficient degree,” says Stemmer.

What could change in day-to-day project work?

For Stemmer, this would be particularly relevant to project work: “Many of our freelancers are brought in precisely because companies need highly specific expertise for a limited period. During that time, however, they are often expected not only to provide external advice but also to deliver concrete results. If the legal framework better reflected these modern project arrangements, that would be an important development for the market.

“In my view, the ministerial draft bill is a step in the right direction because it could help ensure that different forms of project work are considered in a more differentiated way. Demand for external expertise is high, the skills shortage is real, and there is a wide range of potential applications. Particularly where projects are time-critical and limited in duration, or where new industry expertise is required that is not yet sufficiently available in the permanent recruitment market – for example, in AI governance – engaging freelancers can make sense.

“At the same time, companies frequently face uncertainty about whether engaging an external professional carries a risk of false self-employment. A set of rules better aligned with different project arrangements could create greater legal certainty and confidence. This would benefit not only collaboration between companies and freelancers but also the German project market as a whole.”

New self-employment does not mean no social security

One point is particularly important: the proposed “new self-employment” should not be equated with a complete exemption from social security obligations.

Under the current draft, this form of self-employment would generally involve compulsory coverage under the statutory pension insurance scheme. Corresponding reporting and contribution obligations would also apply to clients. The pension insurance contribution would be borne entirely by the self-employed individual. However, the practical administration would be handled by the client, who would withhold the relevant contribution and remit it to the pension insurance scheme.

Freelancers should therefore not view the model as a simplified or “more relaxed” version of existing self-employment. Rather, it is intended to establish a new framework under social security law that opens up more possibilities for practical collaboration while also involving certain obligations.

“In my view, compulsory pension insurance should not present a fundamental obstacle. Many self-employed professionals are willing to pay social security contributions and thereby also take responsibility for their retirement provision. What matters more is establishing a clear legal framework that distinguishes genuinely self-employed project work from employment. If this distinction can be made with greater legal certainty and in a more practical way, it could also give greater confidence to companies that currently refrain from engaging external specialists for fear of potential false self-employment. The obligation to pay contributions alone does not automatically make an activity compliant – but it can form part of a clearly defined and reliable framework for self-employed project work.”

Nothing has been decided yet

Despite all the attention surrounding the draft, one thing remains clear: “new self-employment” is not yet part of the law currently in force.

The ministerial draft bill is going through the legislative process, and individual provisions may still change. Implementation is currently planned for January 2028.

“There is therefore currently no reason for freelancers to make hasty changes to their existing projects or contractual arrangements on the basis of the draft,” emphasises Stemmer. “What is more interesting is to follow how things develop. If the provision is introduced, we will need to look closely at its final form and the project arrangements for which it could actually make sense.”

What freelancers should take away now

Above all, the draft bill shows one thing: the question of how modern self-employment and project-based work can be reflected in law is evolving.

For freelancers and interim managers, the proposed “new self-employment” could, in the future, open up additional opportunities to contribute their expertise to projects that require intensive collaboration with the client. However, the actual scale of its impact will depend on the final form of the legislation.

If you are currently working as a freelancer or interim manager, or are looking for a new project, you are welcome to get in touch with our experts at Robert Walters. We connect experienced interim professionals with companies specifically seeking external expertise for their projects.