The social insurance obligation of teaching staff is a very relevant ongoing topic. The Federal Social Court's (Bundessozialgericht, BSG) “Herrenberg” judgment from 2022 (case no.: B 12 R 3/20) is viewed as breaking from existing case law and led to uncertainty and discontent for not just music schools but also for other educational establishments.
In November 2025 similar circumstances took place in Kassel. This time the case was not about music school teachers but about the social insurance status of flight instructors.In its decision dated13 November 2025 (B 12 BA 2/23 R), the BSG emphasised the importance of section 127 (1) sentence 1 of the German Social Code, Volume IV (SGB IV) thus providing an opportunity to examine this transition regulation.
Facts of the matter
The dispute started with an employment status determination assessment in accordance with section 7a SGB IV. In this assessment the respondent, the German Pension Insurance Association (DRV Bund), determined that the claimant's job as a flight instructor for the airline, which was also a claimant, was not a self-employed role. Rather, the flight instructor was a dependent employee of the airline and therefore there was an obligation to pay social insurance contributions. The flight instructor and the airline appealedL this decision.
Decision of the BSG
The BSG held that the German Pension Insurance Association was incorrect in determining a social insurance obligation for the flight instructor and ruled on behalf of the claimants.
The appellate court grounds, however, were not based on the fact that the respondent had misjudged the status of the flight instructor. On the contrary, the court held that it completely agreed with classifying the flight instructor as a dependent employee of the airline. Nevertheless, in the court’s opinion a social insurance obligation based on the transition regulation of section 127 (1) sentence 1 SGB IV will only arise when the regulation comes into force on 1 January 2028.
It held that the transition regulation which came into force on 1 March 2025 is applicable here and its requirements have been fulfilled: The claimant had a teaching role, in the employment status determination assessment the respondent determined that the claimant was employed, both claimants proceeded on the assumption that the work involved a self-employed activity and the claimant has validly agreed to the postponement of the commencement of the social insurance obligation. It is innocuous, in particular, that the flight instructor only agreed to the social insurance obligation in the appeal proceedings.
Classification of this decision
The decision from last year (B 12 BA 2/23 R), which until now has only been available as a final report, presents nothing new as far as determining employment status is concerned. However, it (once again) gives a reason for parties in educational establishments to deal with the transition regulation in section 127 SGB IV.As this case illustrates, this leads to the social insurance obligation not existing until 1 January 2028 despite the dependant employment.
What may look like a free ticket at first glance is in fact following the objective of giving educational establishments time to adapt their frameworks until the end of 2027 in order to alter their organisational structures to conform with the new social insurance regulations. At the same time, this provides security – for some time at least – for those educational establishments which were unsure after the high-profile Herrenberg judgment.
Herrenberg judgment
In 2022 the BSG held that a freelance teacher at a music school was to be classified as subject to the obligation to pay social insurance. The new orientation and weighting of the differentiation criteria when determining whether the job was dependent employment or self-employed work grabbed attention.
In a comparable case in 2018 the BSG held that the teacher was self-employed. In 2022 the court ultimately came to a different conclusion and found that the teacher was in dependent employment. The BSG justified its decision in particular due to the fact that the teacher took no entrepreneurial risks nor had the prospect of any business opportunities. The decision was very surprising – and unsettling.
Developments since Herrenberg
The social insurance agencies were the first to react to the decision and acted by readjusting the “Assessing the legal social insurance status of teachers and lecturers” guidelines with effect from 1 July 2023 as a reaction to the most recent case law.
The legislature also became involved and established the transition regulation in section 127 SGB IV. Affected educational establishments have until 31 December 2027 to adjust to the new, stricter framework conditions and are until then released from the requirements of section 127 SGB IV regarding the payment of social insurance contributions, even if the teacher in question would be deemed an employee under the new assessment criteria and thereby would be subject to social insurance contributions.
Comments
There is a not insignificant risk that many currently self-employed teachers will be classified as being subject to social insurance contributions from 1 January 2028 due to the Herrenberg decision as well as the stricter regulations.
Changes to contracts
In order to avoid this, educational establishments should use the transition period and when required not only update their contractual templates but, in particular, also adjust their business or organisational model to ensure that teachers remain self-employed under the new regulations.
The list of indicators of self-employment is long; since the Herrenberg judgment, whether the teacher pursues any business opportunities or takes any entrepreneurial risks for which they are themselves responsible also plays a crucial role.
Ultimately the distinction between self-employed work and dependent employment continues to be decided on a case-by-case basis, where it is not the drafting of the contract, but rather common practice that is decisive for the legal social insurance status of the teacher.
Employment status determination assessment
As the classification is always decided on a case-by-case basis taking all the circumstances into account, there is absolutely no legal certainty provided by amended contracts and working methods. Therefore, in cases of doubt, an employment status determination assessment in accordance with section 7a SGB IV should be considered. On request the German Pension Insurance Association will conduct such an assessment and make a legally binding decision on the social insurance law status of a person, i.e. whether they are in dependent employment or are self-employed.
Using the transition regulation in section 127 SGB IV
In any case, educational establishments can and should make use of the transition regulation in section 127 SGB IV before 31 December 2027.
The benefit of using the regulation is clear: legal certainty regarding the social insurance law status of teachers can be achieved by 31 December 2027. Educational establishments do not have to pay social insurance contributions for teachers in this time frame without the risk of repayment or even the risk of committing a criminal offence for social insurance fraud under section 266a of the German Criminal Code ((Strafgesetzbuch, StGB).
The transition regulation in section 127 SGB IV can be implemented by way of a bipartite agreement. On the one hand, this should expressly state that contractual parties at the time the contract was concluded are/were agreed on self-employed work. On the other the teacher must expressly agree that the educational establishment's social insurance obligation due to their employment will first come into force on 1 January 2028.
We recommend that this express statement be made in written or text form, even if section 127 SGB IV does not prescribe a specific form. Educational establishments should therefore adapt their contractual templates for new contracted freelance staff accordingly and conclude supplementary agreements with teachers with whom they already have an existing contractual relationship.
Outlook
It will be exciting to see how the situation will proceed from 1 January 2028 and whether the legislature will have to become involved again. Crucially these developments will determine whether employing teachers as freelancers will continue to be viable in the future or whether this model has indeed become obsolete.
In any case, educational establishments would be well advised to actively use the transition period, not only to make use of the regulation in section 127 SGB IV but also to critically assess existing contracts and their common contractual practices and to achieve the greatest possible level of legal certainty.
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