Subcontractor liability for social security contributions and minimum wages means extensive organisational and legal costs for companies, which for the CEP sector (CEP = courier, express and parcel services) will continue to increase as a result of the planned Parcel Courier Protection Act. The law firm Fieldfisher relieves its clients of the corresponding effort by making the corresponding compliance processes efficient and legally compliant supported by the digital technology, know-how and resources of our own alternative legal service provider "Condor". The client remains informed about the progress of the process and the results at all times, requires no additional resources for the compliance processes and can be sure that the legal requirements are met. This is just one example of Fieldfisher's digitized legal advice.
Draft Parcel Courier Protection Act
On 18.09.2019, the Federal Cabinet passed a draft for a Parcel Courier Protection Act, which is intended to introduce a so-called subcontractor liability for the CEP sector. According to the draft law, parcel service providers who award contracts to subcontractors are to be liable for subcontractors correctly paying social security contributions for their employees.
A corresponding subcontractor liability has been in force for some time for the construction industry and the meat industry. Since 01.01.2015, cross-industry subcontractor liability has applied to the payment of the minimum wage.
For the CEP sector, this means that in addition to the already required checks as to whether a subcontractor pays its employees the minimum wage, the check with regard to the payment of social security contributions is now added.
The general contractor can relieve himself if he obtains a certificate of harmlessness from the respective health insurance funds or professional associations from his company.
For the CEP sector, the law means a considerable additional administrative burden. To the extent that companies have already introduced processes to have subcontractors prove payment of the minimum wage, this process must now be extended with regard to the payment of social security contributions. The Federal Government's forecast of 8 million euros per year for the estimated 8,000 companies affected is likely to be considerably higher in the initial phase of the law.
Fieldfisher is available at any time to answer any questions you may have about the planned Parcel Courier Protection Act and our legal tech solutions providing legally secure, transparent and cost-efficient solutions for legal and compliance issues and processes.
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