Foreign Seasonal Workers: What Employers Need to Know About Social Security

Whether in agriculture, the restaurant industry, the events sector, or construction—many companies rely on seasonal workers from abroad. However, employing them presents challenges under social security law. Errors in classification often aren’t discovered until a tax audit and can then lead to substantial retroactive contribution assessments covering several years. Employers who hire seasonal workers should be familiar with the basic rules.

What Constitutes a Seasonal Worker in the Legal Sense

A seasonal worker is defined as someone who comes to Germany temporarily for a fixed-term assignment of up to eight months to meet a seasonal, regularly recurring need for labor. This classification is particularly relevant for health insurance, especially in connection with the question of whether so-called “follow-up coverage” takes effect after employment ends. In the other branches of social insurance—namely, pension, unemployment, long-term care, and workers’ compensation insurance—the general regulations apply.

Which Social Security Law Applies

In principle, German social security law applies to employment in Germany. However, there are exceptions to this principle of territoriality that must be regularly examined, particularly in the case of foreign workers. If a person is posted to Germany by their foreign employer, the social security law of the home country may continue to apply. The same may apply to employment in multiple countries. In addition, there are bilateral social security agreements with numerous countries that take precedence. Employers should therefore clarify in each individual case which law actually applies—a blanket assumption is not sufficient.

Short-Term Employment: A Common Misconception Regarding Seasonal Workers

Many employers assume that fixed-term seasonal employment can be classified as short-term employment and is therefore exempt from social security contributions. In practice, however, this is rarely the case for foreign seasonal workers. The reason: Short-term employment requires, among other things, that the work not be performed on a professional basis. Employment is considered professional if the employee derives all or the majority of their livelihood from it. Since seasonal work in Germany represents the sole or primary source of income for many foreign workers, it is generally assumed to be professional in nature.

In addition, multiple short-term jobs within a calendar year are added together. So anyone who works for different employers in succession quickly exceeds the limits. The result: full social security coverage starting from the first day.

Health Insurance: Choosing a Plan and Continuation of Coverage

Seasonal workers have 14 days after the start of employment to choose a health insurance provider. If they do not do so, the provider is determined by the employer.

After employment ends, regular employees are normally covered by automatic continuation of coverage through the health insurance provider that was most recently responsible for them. However, special conditions apply to seasonal workers: Continuation coverage only takes effect if the person in question actively declares their intention to enroll within three months and provides proof that they have their residence or habitual abode in Germany. If the seasonal worker returns to their home country after employment ends, follow-up coverage generally does not apply.

Employers are required to indicate the seasonal status of the employee when registering them with social security. In certain industries, there is also an obligation to report immediately upon the start of employment.

Minimum Wage and Non-Cash Benefits: Two Common Pitfalls

Foreign seasonal workers are entitled to the statutory minimum wage just like all other employees in Germany. The minimum wage must be paid in full as a cash benefit. Benefits in kind—such as the provision of housing or meals—may not be counted toward the minimum wage.

However, this does not mean that benefits in kind are irrelevant for payroll accounting. On the contrary: Accommodation and meals provided by the employer are subject to social security contributions and must be correctly valued and reported. The proper accounting for non-cash benefits is one of the classic areas of scrutiny during tax audits and is a frequent source of additional tax assessments.

About Trimborn . Partner

Trimborn . Partner is an award-winning tax consulting and auditing firm with offices in Düsseldorf and Oberhausen. As experienced tax advisors for small and medium-sized businesses, we support companies in the skilled trades, hospitality, agriculture, and numerous other industries with accurate payroll processing, the classification of employment relationships under social security law, and preparation for tax audits. Please feel free to contact our tax advisory experts in Düsseldorf and Oberhausen.