The situation
The subcontractor chain on two building projects
A general contractor based in Munich is building a residential scheme there and a school in Salzburg. Twelve subcontractors work on the two sites, some posting workers from Romania and Croatia. An inspection on a competitor’s site has made the board ask what the company would owe if a subcontractor stopped paying its people.
The rules exist on both sides of the border, and they reach down the chain. The hours go on working out which obligations the main contractor answers for, whether the liability can be limited, and what evidence protects it. The answer goes to procurement as well as the board.
What the research has to settle
The rules behind the answer
- Germany: minimum pay down the chain
- A business that commissions another to perform work or services is liable, like a guarantor, for the minimum pay owed by that contractor and by every subcontractor below it. In construction, this extends to contributions to the industry’s joint funds.
- Germany: social contributions in construction
- In construction, the main contractor is also liable for subcontractors’ social security contributions above a contract-value threshold. It can be released by showing it checked the subcontractor with due care, for example through prequalification.
- Austria: contributions and wage tax
- Austrian law makes a contractor that passes on construction work liable for the subcontractor’s unpaid social insurance contributions and wage taxes, up to a share of the price. Paying that share to the health insurance fund, or using subcontractors on the official list of exempt companies, releases it.
- Austria: posted workers’ pay
- For workers posted to Austria in construction, Austrian anti-wage-dumping law can make the client liable for the posted workers’ minimum pay. The conditions and how to avoid the liability are what the research has to set out.
How it runs in azta
From the question to the document
The question, as you would type it
German general contractor with sites in Munich and Salzburg and twelve subcontractors, some posting workers from Romania and Croatia. What is our statutory liability for subcontractors’ wages, social contributions and wage tax in Germany and Austria, and how can we limit it?
You start with
The subcontractor chain on two building projects
- 01
Describe the chain
Give the sites, the subcontractors, who posts workers from where and the contract values. azta searches the German and Austrian wage, social-security and posting laws and the EU posting rules.
Cited research· Free - 02
Read the liability provisions
Open each cited provision in the reader, in German, with its in-force status, to check the conditions for release.
Atlas statute reader - 03
Draft the board note
Ask for a note per country with the liability, how to limit it and the clauses procurement should use. Edit it in Canvas.
Canvas · Ask azta· Pro You send
A note on the main contractor’s statutory liability and how to manage it
What you get
A note on the main contractor’s statutory liability and how to manage it
Board note · draft
Liability for subcontractors’ wages and contributions
Germany. On the Munich site we are liable for the minimum pay owed by every subcontractor in the chain, as if we had guaranteed it, and for their social security contributions above the statutory contract value. Documented checks on each subcontractor before award are our main protection.
Austria. On the Salzburg site we are liable for subcontractors’ unpaid social insurance contributions and wage taxes up to a share of each invoice. We avoid that by checking each subcontractor against the list of exempt companies when we pay, or by paying the share to the health insurance fund directly.
Procurement. We recommend adding to every subcontract a duty to provide monthly proof of wage and contribution payments, a right to withhold payment, and a ban on further subcontracting without our consent.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
15 minutes a month
At €115 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 32
- Capacity at your rate
- €3,726
- More subcontractor liability notes a quarter
- 1.5
- Return on Pro
- 11.5×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoWhat stays with you
- Checking each subcontractor and keeping the evidence.
- The subcontract terms and the commercial risk you accept.
- Handling inspections and claims as they arise.
Frequently asked questions
- Does azta check whether a subcontractor is on the exempt list?
- No. It researches the rules and drafts the note. Checking each subcontractor against the official lists stays with procurement.
- Does it cover the posting notifications too?
- Yes. Ask about the notifications and documents required for posted workers in each country and azta cites the rules.
- Can it draft the subcontract clauses?
- Yes. Ask for clauses on proof of payment and withholding, edit them in Canvas and check them against your standard subcontract.
