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15 December 2025
Publication series – 2 of 72 Insights
HR compliance in the energy sector – customs authorities step up the fight against sham-employment
- Briefing
The German economy is caught between crisis and a shortage of skilled workers. Companies are reluctant to increase their own staffing levels. Nevertheless, there is a high demand for qualified specialists. This means that flexible staffing models are in demand and external specialists are often called upon. This is particularly true in the energy sector. The ambitious targets for the energy transition cannot be met by energy supply companies without highly specialised external workforce. Engineers, data analysts, developers, external safety specialists or project managers: all these activities are needed, whether for data migration, laying cable routes or the climate-friendly conversion of plants that previously generated energy from coal and gas.
However, the use of external personnel is subject to strict rules in Germany. The activities of external personnel must be clearly distinguishable from those of internal employees. In addition, external personnel may not be included in internal reporting structures. Otherwise, there is a risk of fines, additional social security contributions and taxes, and in the worst case, even criminal liability with prison sentences of up to five years for management. In addition, external specialists may attempt to enforce employment with the company after completing their assignments.
Upgrading the audit authorities
In the past, many legally incorrect assignments of external workers have not been detected because the German auditing authorities lacked the capacity to systematically investigate violations. This is now likely to change. Since 2025, the German Pension Insurance Fund has been conducting test runs for AI-supported audits. From 2026, artificial intelligence for risk-oriented employer audits (the so-called KIRA-AI) will be used to carry out audits at companies (Digitalstrategie | Künstliche Intelligenz entlastet Mitarbeitende und schützt das Sozialversicherungssystem | Deutsche Rentenversicherung Bund). KIRA will scan all digital (audit) data available at companies for patterns that indicate sham-employment. KIRA will be accompanied by an obligation for companies to digitise their documents for auditing purposes in a verifiable manner. The risk of bogus self-employment being detected in regular audits will increase significantly with the use of KIRA.
In addition, customs authorities are now also to be strengthened. In November 2025, the Bundestag passed a reform of the Act to Combat Illegal Employment, which will digitally "upgrade" customs authorities – the Financial Control Unit for Illegal Employment (the so-called “FKS”) – and give them additional powers. Sham-employment – ultimately nothing more than undeclared work – is therefore likely to become an even greater focus of official audits. This creates another "gateway" for official audits. The draft law only needs to be approved by the Bundesrat, and the new law is then expected to come into force at the beginning of 2026.
The draft explicitly defines as its objective a significant increase in the detection of contribution evasion through sham-employment. Contribution revenue is now to be generated to a much greater extent from ad hoc customs audits. AI-supported data analysis is to be used to evaluate large amounts of data efficiently and in a targeted manner. In future, the FKS will be able to investigate on the basis of objective and systematic risk indicators (e.g. employee and wage structure, ratio of personnel expenses to turnover, type of work/service, etc.). The FKS will be able to compare data from the DRV and the tax authorities even more closely with its own database. In future, companies that generate a comparatively high proportion of their turnover from external services will therefore be more likely to come to the attention of customs authorities, which will compare the company's turnover with the number of employees subject to social security contributions reported to the DRV. The lower the wage ratio determined in this way, the higher the probability of a customs investigation.
Outdated compliance systems in companies
The strengthened authorities are encountering compliance systems in companies that are in some cases outdated. Many companies set up appropriate compliance systems in the wake of the reform of the German Temporary Employment Act in 2017. Since then, the social courts and audit authorities have completely changed the criteria for the legally compliant use of external personnel. The focus is now purely on the nature of the work performed. The decisive factors are now the degree of integration into the company's organisation and the interaction with permanent employees. Such integration is particularly likely when commissioning highly specialised experts, e.g. for IT/engineering projects and interim managers, as agile methods are very often used in joint teams in these cases. Simply expanding capacity and/or filling vacancies with external staff also carries a high risk of bogus self-employment. The criteria applied in many companies' compliance processes are often not sufficiently adapted to this "shift" in case law. However, the change in case law does not only apply to the future; it also covers assignments that have already been completed.
Conclusion
The digital upgrade should enable the supervisory authorities to track and detect incorrect use of external personnel much more systematically. In view of the serious consequences, it is essential to establish a compliance process for the deployment of external personnel. It is strongly recommended that existing compliance systems also be reviewed in light of the change in case law and adjusted if necessary. Otherwise, those not acting within the company may be deemed acting intentionally, as the authorities assume that the changes to the demarcation criteria are known.
In this series
HR compliance in the energy sector – customs authorities step up the fight against sham-employment
15 December 2025
The Current Challenges for Offshore Wind Energy in Germany
2 December 2025
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Offshore wind in Germany: from market premiums to Contracts for Difference?
28 November 2025
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Energy Sharing under Section 42 of the German Energy Industry Act (EnWG)
26 November 2025
Bundestag Decides on the Privileging of Battery Storage Facilities in Outdoor Areas under § 35 (1) BauGB
12 November 2025
Industrial electricity price: Initial assessment and opportunities for companies
21 November 2025
by Dr. Markus Böhme, LL.M. (Nottingham), Johannes Schaadt-Wambach, LL.M. (Prag)
FIDIC – An introduction to the FIDIC Suite 2017
22 October 2025
by Multiple authors
The Renewable Energy Expansion Acceleration Act – a boost for the energy transition in Austria?
23 September 2025
Federal Network Agency discussion paper on reforming grid fees for industry and commerce
25 September 2025
by Multiple authors
German-Dutch Treaty on Cross-Border Energy Projects
18 September 2025
by Multiple authors
Energy communities in Austria and the new Electricity Industry Act (ElWG)
15 September 2025
New amendment to the Energy Industry Act (EnWG) introduced in July and August 2025
8 September 2025
Clean Industrial Deal State Aid Framework (CISAF) – a new state aid framework for the green transformation of industry
8 September 2025
by Dr. Michael Brüggemann, Johannes Schaadt-Wambach, LL.M. (Prag)
Industrial electricity prices: initial assessment and opportunities for businesses
18 August 2025
by Johannes Schaadt-Wambach, LL.M. (Prag), Dr. Markus Böhme, LL.M. (Nottingham)
Regulatory Framework for Transmission System Operators in Germany
18 August 2025
by Multiple authors
Court ruling on the effectiveness of availability guarantees for wind turbines
31 July 2025
New Legal Framework for the Commercial Use of Carbon Capture and Storage (CCS) and Carbon Capture and Utilisation (CCU)
11 July 2025
by Multiple authors
Are offshore wind converter platforms a bottleneck in the energy transition? New German government wants to create production capacities at German shipyards
17 June 2025
by Multiple authors
Speeding up the energy transition - the new German government’s plans for gas and steam power plants and its quest for the right technology for renewable energy
8 May 2025
by Multiple authors
Update - Change of government opens the door to carbon capture and storage and carbon capture and utilisation
17 April 2025
by Multiple authors
The special fund for infrastructure and climate protection - what is next?
10 April 2025
by Multiple authors
Changes to CBAM through Omnibus legislative package
10 April 2025
The role of heat probes in the energy transition: Authorisation procedures and potential
26 March 2025
CJEU judgement on customer installations in accordance with Section 3 No. 24a Law on the Energy Industry EnWG
26 March 2025
by Dr. Markus Böhme, LL.M. (Nottingham), Dr. Christian Ertel
Will the new German government open the door for carbon capture and storage?
26 February 2025
by Multiple authors
Waste heat from data centres - new reporting obligations under the EnEfG
6 February 2025
by Multiple authors
Oman and Belgium Sign Landmark MoU on Green Hydrogen Cooperation
11 December 2024
Decision day: Grid fee exemption in customer systems and energy price brake put to the test
28 November 2024
by Dr. Christian Ertel, Dr. Markus Böhme, LL.M. (Nottingham)
Hydrogen core network - The Federal Network Agency’s strategy for the energy transition
11 November 2024
by Multiple authors
Amendment to the Energy Industry Act: changes for energy supply companies and grid and system operators
18 September 2024
by Dr. Christian Ertel, Dr. Markus Böhme, LL.M. (Nottingham)
Standard Essential Patents: A new challenge for the IoT and smart meter world
10 September 2024
Land acquisition and data protection: The importance of the GDPR when project developers request owner data
18 July 2024
by Dr. Patrick Vincent Zurheide, LL.M. (Aberdeen), Dr. Julia Wulff
Municipalities to share profit in wind turbines and ground-mounted photovoltaic systems
11 July 2024
by Multiple authors
Solar Package I - Overview of Changes to Ground-Mounted and Building-Mounted PV Systems
27 May 2024
Mandatory special charge for open space photovoltaic systems in Brandenburg
21 February 2024
by Multiple authors
A new era for wind energy investments in Hungary
Power Play: Renewable Energy Update
26 January 2024
Updating the National Hydrogen Strategy
6 November 2023
by Dr. Niels L. Lange, LL.M. (Stellenbosch), Dr. Janina Pochhammer
The new CO2 border adjustment mechanism (Carbon Border Adjustment Mechanism - “CBAM”) - first statutory reporting obligations set for January 2024
Power Play: Renewable Energy Update
3 November 2023
New IT security requirements for the energy sector
Power Play: Renewable Energy Update
1 September 2023
by Dr. Paul Voigt, Lic. en Derecho, CIPP/E, Alexander Schmalenberger, LL.B.
Does monument protection hinder the expansion of renewable energies?
Power Play: Renewable Energy Update
16 August 2023
The amending law to strengthen digitisation in the urban land use planning process and the further expansion of renewable energies
Power Play: Renewable Energy Update
6 July 2023
Challenges for data center operators - The federal government’s draft bill for an energy efficiency act
Power Play: Renewable Energy Update
12 April 2023
by Multiple authors
The Energy Charter Treaty in the Light of the Electricity Price Brake: An opportunity for investors to litigate?
27 January 2023
Ordinance for Determining Critical Infrastructures (KritisV): Renewable energy plants as critical infrastructure and requirements for IT protection
Power Play: Renewable Energy Update
12 July 2022
by Dr. Paul Voigt, Lic. en Derecho, CIPP/E, Dr. Markus Böhme, LL.M. (Nottingham)
Liquefied Natural Gas Projects in Germany: The LNG Acceleration Act
Q&A series: Energy & Infrastructure
10 June 2022
Participation of local municipalities in the context of wind and photovoltaic projects
Power Play: Renewable Energy Update
5 May 2022
Renewable Energy Wrap-Up – France
Power Play: Renewable Energy Update
27 April 2022
Renewable Energy Wrap-Up - United Kingdom
Power Play: Renewable Energy Update
15 March 2022
Building energy performance: the revised Energy Performance of Buildings Directive
Power Play: Renewable Energy Update
14 February 2022
Fit for 55 – Hydrogen and the Reform of the European Gas Market
Power Play: Renewable Energy Update
11 January 2022
Renewable Energy Wrap-Up – Netherlands
Power Play: Renewable Energy Update
2 December 2021
Renewable Energy Wrap-Up – Poland
Power Play: Renewable Energy Update
21 September 2021
by Olav Nemling
Renewable Energy Wrap-Up – Austria
Power Play: Renewable Energy Update
18 August 2021
Renewable Energy Wrap-Up - Germany
Power Play: Renewable Energy Update
12 July 2021
Floating Foundations for Offshore Wind Farms
Power Play: Renewable Energy Update
8 June 2021
Species protection exemption: Significance for wind energy
Power Play: Renewable Energy Update
25 May 2021
Power-to-Hydrogen
Power Play: Renewable Energy Update
6 April 2021
Focus PV – Floating Solar and Agrivoltaics
Power Play: Renewable Energy Update
23 March 2021
