Criminal defense for Withholding Wages in Bonn

Legal Basis

§ 266a StGB

Sentencing Range

Imprisonment of up to five years or a fine

Summary

Withholding employees' social security contributions from the collecting agency as an employer

An accusation of withholding social-security contributions under Section 266a StGB is one of the most frequent charges against employers and managing directors and often follows a company crisis. Much turns on the actual employer status and on whether payment was still possible. Attorney Philip Bafteh defends accused persons in Bonn, Cologne and nationwide – after full access to the case file.

Withholding and Embezzling Wages (Section 266a StGB)

Withholding and embezzling wages is one of the most common economic crimes in Germany. The provision protects the social security system and employees from the loss of social insurance entitlements. Employers who fail to properly remit social security contributions are criminally liable — regardless of whether this occurs due to financial hardship or with the intent to enrich. Expats who employ staff in Germany, including household employees, should be aware of these strict obligations.

Legal Basis

Section 266a(1) of the German Criminal Code (StGB) provides:

“Anyone who, as an employer, withholds from the collecting agency employees’ contributions to social security including employment promotion, regardless of whether wages are paid, shall be punished with imprisonment of up to five years or a fine.”

Section 266a(2) StGB additionally covers withholding employer contributions through incorrect or incomplete information. Section 266a(3) StGB criminalises embezzling portions of wages.

Elements of the Offence

Employer status: Only a person who is an employer in the social security law sense can be a perpetrator. This also includes de facto employers and may affect the managing director of a GmbH who is responsible for remitting contributions.

Employee contributions: Covered are employee shares of health, long-term care, pension, and unemployment insurance. The key point is that contributions are “withheld,” meaning they are not remitted to the collecting agency when due.

Withholding: Contributions are withheld when they are not paid when due. The obligation to remit exists regardless of whether the employer has actually paid out the wages.

Intent: The employer must act intentionally. Conditional intent suffices. Anyone who recognises the possibility that contributions will not be remitted on time and accepts this possibility acts intentionally.

Unreasonableness as an excuse: In exceptional cases, payment of contributions may be unreasonable if the employer demonstrates that they undertook all reasonable efforts to raise the funds and the non-payment is not attributable to a cause within their control.

Typical Methods of Commission

Common forms include non-payment of social security contributions during a business crisis, employing workers “off the books” (without registering them for social security), declaring lower wages to the collecting agency while paying higher amounts to employees, circumventing social security obligations through bogus self-employment models, and using withheld employee contributions for other business purposes.

Sentencing Range

Withholding employee contributions carries a penalty of up to five years’ imprisonment or a fine. In especially serious cases (Section 266a(4) StGB), such as acting on a commercial basis, continued commission with substantial contribution shortfalls, or acting in concert with others, the penalty ranges from six months to ten years’ imprisonment. In addition to the sentence, confiscation of proceeds may be ordered. Subsequent payment of contributions can mitigate the sentence and, under certain conditions, may even lead to discontinuation of proceedings.

Typical Defense Strategies

A key defense approach concerns the employer status: was the accused actually an employer, or was there genuine self-employment? The distinction between dependent employment and self-employment is frequently disputed in practice. Furthermore, the reasonableness of contribution payment is examined — could the employer actually raise the contributions? Subsequent payment of contributions can, under Section 266a(6) StGB, lead to mitigation or even waiver of punishment. Calculation errors regarding the amount of damage also regularly provide defense opportunities, as the precise determination of withheld contributions is often complex.

Summons or accusation of Withholding Wages? What matters now

Make no statement to the police at first

As an accused person you are never obliged to comment on the allegation. Anything said to the police can be used against you. Provide statements only through your defense attorney and only after reviewing the case file.

File inspection comes first

A sound defense against the allegation of Withholding Wages requires knowledge of the investigation file. Only once the available evidence is clear can we decide whether a statement is advisable or whether remaining silent is the better strategy.

Possible discontinuation of proceedings

Not every case ends in a trial. Depending on the evidence and any prior record, the proceedings may be discontinued for lack of sufficient suspicion (§ 170 II StPO), for triviality (§ 153 StPO) or subject to conditions (§ 153a StPO). Often a penalty order without a public trial can be achieved.

Victim-offender mediation and restitution

In many cases, victim-offender mediation or making good the damage (§ 46a StGB) can significantly reduce the sentence or enable a discontinuation. Whether this is advisable in your case is something we assess based on the file.

What we do after reviewing the file

We examine the evidence for reliability and admissibility, look for procedural errors, develop the defense strategy, seek a dismissal of the proceedings through discussions with the public prosecutor’s office and represent you, if necessary, at trial before the Bonn Local Court or Bonn Regional Court.

Available 24/7: +49 228 504 463 36

This information does not replace a review of the individual case. In criminal proceedings, the defense strategy depends substantially on the case file, the specific allegation and the evidence.