Federal Social Court Limits Obligation to Artists' Social Security Payments

In its decision of August 13, 2010, the Federal Social Court (BSG, Case B 3 KS 2/09 R) limited the obligation to make artists' social security payments.

Under the Artists Social Security Act [KSVG], such entrepreneurs are obligated to make artists' social security payments who in their advertising and public relations work repeatedly award orders to self-employed artists or publicists. In the past, the artists' social security fund had requested payment from a chain of retail stores which had its advertising brochures designed by a German private limited partnership [KG].

Under the KSVG, an artist is who creates, practices or teaches music or art; a publicist is who is active in the field of publicity or who teaches it. It had been the subject of contradicting court decisions whether a KG is covered by this term. After the Federal Social Court had affirmed in 2005 the artist qualification of a partnership under the German Civil Code consisting of artists, it now denied the artist qualification of the KG, although it is a partnership as well. In doing so, the Federal Social Court considered primarily the legally independent character and thus the proximity to legal entities. Therefore, it was not the chain of stores as principal, but the KG as contractor itself which was responsible for making the appropriate social security payments.

Lawyer Dr. Frank Mitzkus from the law firm of Heuking Kühn Lüer Wojtek which had conducted the litigation on behalf of the chain of retail stores: "The judgment of the Federal Social Court provides important clarification for practical purposes. A large number of entrepreneurs who have their advertising and public relations work done by partnerships, oftentimes are not even aware of the fact that they could possibly be responsible for making artists' social security payments. The court, holding in its decision that private limited partnerships are not artists or publicists, allows for the fact that limited partners typically are excluded from management and themselves are not working as artists or publicists."

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