Social Security Obligations for Association Board Members in Germany

The starting point for analyzing the status of association board members is their position as members of the association's statutory governing body under Section 26 of the German Civil Code (BGB). For social security purposes, however, what matters is not this statutory status itself, but whether the specific activities performed constitute employment within the meaning of Section 7(1) of Book IV of the German Social Code (SGB IV). The established criteria are the following:

• whether the individual is subject to instructions,
• whether they are integrated into the organization's operational structure,
• whether they bear any meaningful entrepreneurial risk, and
• how the relationship functions in practice.

The fact that merely serving as a statutory board member does not in itself exempt an individual from mandatory social security contributions is also reflected in the statutory framework. Only members of the management board of a German stock corporation are expressly exempt from compulsory social insurance under specific statutory provisions (Section 1, sentence 3, SGB VI, and Section 27(1), no. 5, sentence 1, SGB III). This exception does not extend to board members of other legal entities, including associations and foundations. Conversely, this means that board members are not automatically exempt from mandatory social security coverage merely because of their governing-body status (Federal Social Court (BSG), judgments of February 23, 2021, B 12 R 15/19 R, and December 12, 2023, B 12 R 11/21 R).

Even board members who represent the association externally, chair meetings, and bear significant responsibility may still be classified as employees for social security purposes. This is the case where they are integrated into the association's internal organizational structure, lack sufficient legal authority to block decisions they disagree with, do not bear any meaningful entrepreneurial risk, and receive ongoing remuneration for their work.

The social courts have expressly reaffirmed this principle. The Federal Social Court has held that the established criteria for distinguishing employment from self-employment also apply to activities performed by individuals serving as members of the governing bodies of legal entities, and that board members, too, may qualify as employees (BSG, judgment of December 12, 2023, B 12 R 11/21 R). Likewise, it is well established that even a managerial position with authority to issue instructions to others does not preclude the existence of an employment relationship; extensive decision-making authority alone is not enough to establish self-employment (see, with respect to managing directors of a German limited liability company, BSG, judgment of September 19, 2019, B 12 R 25/18 R). In its judgment of October 9, 2025 (Case No. L 14 BA 39/24), the Higher Social Court of Berlin-Brandenburg applied these principles to the president of an association.

Regular, flat-rate payments of a substantial amount to association board members present a particularly high risk. The further such payments move away from genuine reimbursement of expenses and the more they resemble compensation for ongoing work, the more likely it becomes that the board member will be classified as an employee for social security purposes.

In the case involving the President of the German Bar Association, the amount of the payment proved decisive. The Higher Social Court of Berlin-Brandenburg found that the activity was primarily pursued for financial gain because the president's monthly "expense allowance" exceeded the social security contribution assessment ceiling. In the court's view, it was irrelevant that the president had also accepted and performed the office out of altruistic motives and in the interests of the association's members. What mattered was not his subjective motivation, but the objective structure of the arrangement.

Equally important is the question of what duties the board member actually performs. The case law distinguishes between activities that are inherently tied to a person's role as a member of the association's governing body and administrative or executive management functions that are generally performed in the labor market.

A finding of employment subject to mandatory social security contributions is particularly likely where a board member does more than represent the association and attend board meetings, instead taking responsibility for the organization's day-to-day operations, making administrative decisions, and assuming operational management responsibilities. In cases involving volunteer officeholders in the public sector, the Federal Social Court has already held that performing administrative duties that are generally available in the labor market in exchange for remuneration may constitute employment (BSG, judgment of January 25, 2006, B 12 KR 12/05 R). This principle has since been extended to board members of associations and foundations (see BSG, judgment of February 23, 2021, B 12 R 15/19 R; Higher Social Court of Berlin-Brandenburg, judgment of October 9, 2025, L 14 BA 39/24).

For association board members, this means that the more their role involves day-to-day executive management, asset management, financial oversight, or operational responsibility for personnel and organizational matters, the greater the risk that they will be classified as employees for social security purposes.

A board member may be subject to mandatory social security contributions even if there is no written service agreement or employment contract between the association and the board member. The concept of employment under Section 7(1) of Book IV of the German Social Code does not depend on the legal basis governing the relationship. Neither a formal employment relationship nor a separate civil law contract is required (BSG, judgment of February 23, 2021, B 12 R 15/19 R).

Associations often assume that, without a contractual appointment under civil law, there can be no employment relationship. That assumption is incorrect. The nature and scope of a board member's responsibilities may also be established through the association's bylaws. For purposes of determining social security status, what matters is not whether a separate contract exists, but the actual substance of the relationship.

Drawing on our many years of advising associations, WINHELLER has identified several situations in which the risk of board members being classified as employees is particularly high:

• The board member receives ongoing monthly compensation that clearly exceeds a plausible reimbursement of expenses.
• The board member performs not only representative or governance-related duties but also manages the association's day-to-day operations or assumes operational administrative responsibilities.
• The association's bylaws or established practice provide for close integration into the association's internal organizational structure, require the board member to follow majority decisions of other governing bodies, and allow for the board member's removal from office.
• The board member bears no meaningful entrepreneurial risk, and the role is effectively performed in exchange for fixed, ongoing compensation.

These factors must always be evaluated as part of an overall assessment of all relevant circumstances. No single factor is decisive on its own. Taken together, however, they may strongly support a finding that the board member is subject to mandatory social security contributions.

The decision concerning the President of the German Bar Association does not stand alone. Shortly thereafter, the Higher Social Court of Berlin-Brandenburg continued this line of reasoning in another decision (judgment of January 14, 2026, L 9 BA 38/24); an appeal on points of law is currently pending before the Federal Social Court(B 12 BA 1/26 R). For associations, federations, foundations, and professional chambers, this indicates a noticeably increased level of scrutiny regarding leadership positions that involve expense allowances or similar forms of compensation.

Associations in Germany should maintain a clear distinction between genuinely voluntary board activities and compensated executive functions. If a board position is intended to remain voluntary, the scope of responsibilities and the compensation structure must be consistent with that purpose. Flat-rate payments should be based on reasonable and transparent estimates of actual expenses and should not create the impression that they constitute ongoing compensation for work performed.

If, on the other hand, board members permanently assume substantial operational management and administrative responsibilities and receive significant compensation for these activities, the association should not underestimate the associated social security risks. In such cases, an early assessment of the individual's social security status is generally advisable in order to avoid later claims for additional contributions and related disputes.

The message for legal advisors and associations is therefore clear: Holding a statutory board position and being designated as a volunteer does not create immunity from social security obligations. The decisive question is whether, based on the actual circumstances, the board member's activities remain primarily idealistic and unpaid in nature or whether they have effectively become compensated work performed within the association's organizational structure.