Germany: New draft law requires foreign employers to appoint an authorized representative

In March 2020 The Federal Ministry of Labour and Social Affairs (BMAS) proposed that foreign employers who pay social security contributions in Germany must appoint an authorized representative as of July 1, 2020.

The new draft law is an amendment to Section 28f Social Code Book IV (SGB IV) and serves to ensure that all employers can be audited at any time within the framework of the regular company audits performed by the German Pension Insurance Fund (Deutsche Rentenversicherung), insofar as their employees are subject to German social security law.

Since the Deutsche Rentenversicherung is not allowed to conduct tax audits abroad,
this amendment will enable them to carry out audits at the authorized representative’s premises. What must the authorized representative do? The proposal ensures that the authorized representative shall take over the reporting obligations of the company.