Who is insured, who registers and who pays

Three weeks after the opening, a journeyman injures himself on the circular saw. The owner of the joinery never registered her business with a Berufsgenossenschaft and therefore assumes he was uninsured. The opposite is true: his cover arose by law with the employment, not with any registration. For the owner that is good news with a bill attached: she has owed contributions from the very start as well, on every one of the €7,500 in wages paid in the first quarter.

Insured by law, not by registration

German statutory accident insurance is set out in Book VII of the Social Code (SGB VII). Unlike a private policy, it does not start with a signature or an application. Section 2 SGB VII lists groups who are insured by law. Anyone in one of these groups is covered, whether the business knows about it or not.

First on the list, section 2(1) no. 1 names employees. The provision sets no minimum number of hours and no pay threshold; a temporary helper or a mini-job is employment too. Number 2 adds learners during vocational training and further training in workplaces, training workshops and training courses.

Section 2(2) extends the circle to people who work in the manner of employees. This means helpers who pitch in at the business without an employment contract. For the employer, someone who appears on no payroll can still count as insured if something happens, and the accident then becomes a matter for the insurer.

Some self-employed people are compulsorily covered as well. Section 2(1) no. 9 insures people who work self-employed in health care or in welfare services. Section 4(3) then excludes self-employed doctors, dentists, vets, psychotherapists, non-medical practitioners and pharmacists. A self-employed physiotherapist is not on that list and stays compulsorily insured.

Under section 4(1), those exempt are above all people covered by civil-service accident provisions. For a private employer this hardly matters. Section 4 contains no exemption on application for employees, of the kind the pension insurance offers mini-jobbers.

The owner: statutes or application

Someone who runs a commercial business is, as a rule, not compulsorily insured under section 2. Exceptions such as agriculture or health care rather confirm the rule. For the owner the law offers two other routes: cover under the insurer's statutes and voluntary cover on application.

Section 3(1) no. 1 SGB VII allows the insurer to extend cover by its statutes to business owners and their spouses or civil partners who work in the business. Whether that happens for a given sector is therefore not in the law but in the statutes of the competent Berufsgenossenschaft. Reading them belongs to every business start.

Where the statutes say nothing, section 6(1) no. 1 remains. Business owners and their spouses or civil partners working in the business may insure themselves voluntarily on written or electronic application. Number 2 opens the same route to people who regularly act like independent entrepreneurs in corporations or partnerships.

Number 2 is aimed, for example, at shareholder managing directors who do not count as employees. Whether someone is employed or acts like an entrepreneur is decided case by case under social security law. The course on bogus self-employment covers that line; here only the consequence for accident cover matters.

Under section 6(2), voluntary cover begins on the day after the application is received. It cannot be backdated. Someone who applies only after an accident is not voluntarily insured for that accident, however frustrating that may be in the individual case.

Voluntary cover can also end without anyone cancelling it. It lapses if the contribution or advance payment is not paid within two months of falling due. A new registration has no effect until the arrears are settled. Here the insured person bears the contribution personally, under section 150(1) sentence 2.

Which Berufsgenossenschaft is competent

Under section 114 SGB VII, the accident insurers include the commercial Berufsgenossenschaften, the agricultural Berufsgenossenschaft and the accident funds of the Federation, the Länder and the municipalities. The commercial Berufsgenossenschaften are listed in Annex 1 to the Act.

Section 121(1) makes the commercial Berufsgenossenschaften the default. They are competent for all businesses unless the agricultural Berufsgenossenschaft or a public-sector insurer is competent. Which of them applies depends on the nature and purpose of the business.

Employees follow the business. Under section 133(1), competence for insured persons follows competence for the business they work for. Under subsection 2, agency workers stay with the insurer of the lending business, provided that business owes their pay.

The insurer confirms the start and end of its competence by written notice, says section 136(1). The same subsection names a date that is often overlooked: a business already begins with the preparatory work, for instance with fitting out the premises before the opening.

Under section 136(3) no. 1, the entrepreneur in the legal sense is whoever directly bears the profit or loss of the business. For a GmbH that is the company as a legal person, not its managing director. The company notifies, the company pays, and the notice is addressed to the company.

Employees need to know whom to contact. Section 138 requires the business owner to tell them which insurer is competent and where its office responsible for compensation is located. The provision does not prescribe any particular form for this information.

Within one week: notifying the insurer

Section 192(1) SGB VII requires the business owner to give the competent insurer certain details within one week of the start of the business. The deadline runs from the start, and under section 136 that lies with the preparatory work, not with the first sale.

• the nature and purpose of the business
• the number of insured persons
• the opening day or the day on which the preparatory work began
• in the cases of section 130(2) and (3), the name and residence or habitual abode of the authorised representative

The provision spares founders part of the work. The duty counts as fulfilled if a trade notification under section 14 or 55c of the Trade Regulation Act was filed within one week of the start. How that trade notification works is shown in the course on registering with the tax office.

This relief has limits. It helps only if a trade notification is filed at all, and only if that also happens within the week. Liberal professions do not register a trade. An architect who hires her first employee must therefore notify the insurer herself.

After the start, the insurer must be kept informed. Changes to the nature and purpose of the business, to the conditions for the hazard classes and to other contribution bases must be reported within four weeks under section 192(2). A new activity alongside the existing one may fall under this.

If the person of the business owner changes, for example when a sole proprietorship is sold, section 192(4) requires both the previous owner and the successor to report it within four weeks. Until the end of the calendar year in which the change was reported, both owe the contributions jointly and severally under section 150(4).

Anyone who fails to make the notification under section 192(1) nos. 1 to 3, or the report of a change of owner, or makes it incorrectly or late, commits an administrative offence under section 209(1) no. 8. For these cases subsection 3 sets a fine of up to 2,500 euros.

The contribution is the owner's alone

In health and long-term care insurance, business and employees share the contributions, as the course on those contributions shows. Accident insurance follows a different logic. Under section 150(1) SGB VII, the business owners for whose businesses insured persons work are liable to pay.

There is no employee share, and the business may not introduce one. Section 209(2) makes it an administrative offence for a business owner to offset contributions, wholly or partly, against the employees' pay. In that case subsection 3 allows a fine of up to 5,000 euros.

Accident insurance therefore never appears as a deduction on the payslip. It is a pure cost of the business and belongs in every calculation of an hourly rate. The course on mini-jobs and midi-jobs states expressly that it does not quantify this cost; the mechanism follows here.

The contribution is not paid month by month with the wages but calculated for an apportionment year. So that the insurer is not left empty-handed in the meantime, section 164(1) allows it to levy advances up to the expected annual requirement. Payments may therefore fall due during the year before the final contribution is known.

Pay, hazard class and contribution rate

Section 153(1) names three bases of calculation: the insurer's financial requirement, known as the apportionment target, the pay of the insured persons and the hazard classes. Section 167(1) combines them. The contribution results from the pay to be taken into account, the hazard classes and the contribution rate.

The hazard class measures risk. Under section 157(1), each insurer sets a hazard tariff as autonomous law, divided into tariff positions. Under subsection 3, hazard classes are calculated from the ratio of benefits paid to pay. A sector with many costly accidents relative to its wages therefore receives a higher class.

Under section 157(5), a hazard tariff is valid for no more than six calendar years. For that tariff period the insurer assigns businesses to the hazard classes under section 159(1). With a new tariff a business's class can change even though nothing about its activity has changed.

The contribution rate spreads the financial requirement. Under section 167(2) it is calculated by dividing the apportionment target by the contribution units. Contribution units are pay multiplied by hazard classes. If the insurer needs more money with unchanged wages, the rate rises, and with it every business's contribution.

For the individual business the formula reads: pay times hazard class times contribution rate. Under section 167(3), the details of the calculation are set by the statutes. How your own insurer calculates and rounds is therefore found in its statutes and in the contribution notice, not in the Act.

Pay does not count without limit. Under section 153(2), each insured person's pay is taken into account only up to the maximum annual earnings. That ceiling is set by the statutes and must be looked up for each insurer. Conversely, under subsection 3 the statutes may prescribe minimum annual earnings for insured persons aged 18 or over.

Under section 168(1) the insurer notifies the contribution in writing; under subsection 3 the statutes may instead require business owners to calculate it themselves. A notice may be revoked retroactively to the business's disadvantage only in limited cases, for example when the hazard-class assignment changes or the report was incorrect.

The wage statement by 16 February

To calculate, the insurer has to know the wages. Section 165(1) requires business owners, after the end of each calendar year, to report the pay of the insured persons and the hours worked in the wage statement. The procedure is governed by section 99 of Book IV of the Social Code.

Under section 99(1) SGB IV, the wage statement for the calendar year in which contributions were owed must be transmitted electronically to the competent insurer by 16 February of the following year. It must come from a system-tested payroll program or a system-tested filling aid. A paper form is not enough.

Under subsection 2, the recipient is the accident insurers' receiving office. Anyone reporting for several reporting units or for separate groups of insured persons files each as a separate partial wage statement. For the business this means the statement is produced where the wages are processed.

Errors are not simply overwritten. Subsection 3 requires a faulty report to be cancelled without delay and filed again. Section 168(2a) SGB VII adds that as long as the business does not correct a wrong report, the insurer will not revoke the contribution notice in its favour under section 44 SGB X.

If payroll ends before the turn of the year, the deadline moves forward. In the event of insolvency, closure or transfer of the business, a change of owner or the end of all employment relationships, section 99(4) requires the wage statement with the next payroll run, at the latest within six weeks.

If the statement is missing or wrong, the insurer may estimate the bases under section 165(3). The business then loses control over the figure it pays on. In addition, under section 209(1) no. 5, anyone who fails to report, or reports incorrectly, incompletely or late, commits an administrative offence.

Every wage statement rests on records. Under section 165(4), the business owner must keep records of the underlying facts and retain them for at least five years. In construction, separate records are also required for each service or works contract. Failing to retain them is an administrative offence as well.