Definition and Legal Background of the Honorarium Payment
Die Honorarium Payment is a term of historical origin and denotes a financial benefit that is given voluntarily, on one’s own accord, and in recognition of special merits or circumstances that are not necessarily enforceable by law. Unlike payments owed by statute or contract, the honorarium payment is fundamentally based on a moral or social obligation and not on an enforceable legal claim. Nevertheless, indirect legal consequences and claims can arise in individual cases if honorarium payments are connected with additional circumstances.
Historical Development and Purpose of the Honorarium Payment
Origin and Development
The roots of the honorarium payment trace back to the Middle Ages, when princes, cities, or guilds granted financial honors to deserving citizens, officials, or members. The aim was public recognition and reward for particular loyalty, bravery, or merits in serving the community. Even in the 19th and 20th centuries, honorarium payments were often used as additional honors for civil servants, employees of public institutions, or members of professional associations.
Honorarium Payment in the Present Day
Today, honorarium payments are mainly retained in social, cultural, and community contexts. For example, they are awarded as recognition for extraordinary civic engagement, on anniversaries, departures, or as a one-time financial grant for many years of service. In the economy, employers may make honorarium payments as tokens of appreciation for special achievements, without a legal obligation.
Legal Nature of the Honorarium Payment
Distinction from Other Types of Payments
The honorarium payment is distinct from the following benefits:
- Wages/Salary: Legally or contractually owed compensation arising from an employment relationship.
- Severance: Payment upon termination of an employment relationship pursuant to statutory, collective, or contractual regulations.
- Damages: Payment resulting from tort, breach of contract, or law.
- Gift: Gratuitous transfer of assets by contract, regulated pursuant to §§ 516 ff. BGB.
Due to its voluntary nature, the honorarium payment is fundamentally neither salary, bonus, nor compensation for pain and suffering. It is generally granted unilaterally, usually without any legally binding (contractual) basis.
Legal Basis and Classification
Honorarium payments are generally classified among the so-called obligation-free grants also referred to as “token of honor” or “recognition payment.” Legally, it is generally a voluntary benefit within the meaning of § 516 BGB, provided that there is no exchange of a counter-performance. There is generally no legal claim to the honorarium payment, unless repeated payment results in a company practice or there is another legal basis, such as a contractual commitment.
* For institutional honorarium payments, such as those from the government or public bodies, there may be awarding guidelines or statutes establishing specific conditions.
* In the private law sector, the honorarium payment is regularly an expression of personal discretion and is interpreted as a voluntary benefit.
Tax and Social Security Aspects
Tax Treatment
Whether an honorarium payment is subject to tax depends on the specific payment relationship:
- Tax exemption: If the honorarium payment is a genuine gift and there is no counter-performance, it may be subject to gift tax.
- Income tax liability: If the payment is made in the context of an employment relationship or as concealed compensation, it may count as taxable employment income (EStG, § 19).
- Special rules: Honorarium payments from public institutions to private individuals can be tax-advantaged or exempt under certain conditions (for example, certain awards, honorarium funds, or social recognitions).
Social Security Treatment
If the honorarium payment is made in the context of an existing employment relationship and can be seen as a consideration for work performed, it is generally subject to social security contributions. For genuine honorarium payments not related to professional activity, this obligation does not apply.
Honorarium Payment in Labor and Civil Service Law
Significance in Employment Relationships
If an employee receives an honorarium payment, the decisive factor is whether it is considered part of the wage or a genuine, voluntary benefit. The first establishes rights and obligations within the employment relationship; the latter usually remains outside the scope of employment law duties.
Company Practice: If honorarium payments are repeatedly and regularly made to the same group of people, a company practice in the sense of labor law may arise, giving rise to a claim for future benefits.
Public Service and Civil Service Law
In public service and civil service law, honorarium payments in the form of honorary gifts or honorarium funds are strictly regulated. They may only be paid on a legal basis, for example, as a one-time recognition for special services. Without explicit statutory authorization, honorarium payments to civil servants or employees in the public sector are generally impermissible.
Civil Law Aspects and Repayment Issues
Gift and Grant
The honorarium payment is usually to be treated as a gift (§§ 516 ff. BGB) under civil law, provided that it is given voluntarily and without legal obligation. In cases of mistake, fraud, or revocation of the gift (for instance, due to gross ingratitude), repayment may be possible under the relevant statutory provisions.
Repayment and Challenge
Repayment of honorarium payments is fundamentally excluded unless statutory grounds for repayment exist. Repayment claims can arise if the payment was made by mistake (§ 119 BGB), through fraud (§ 123 BGB), or under the rules of unjust enrichment (§ 812 BGB).
Differences to Similar Terms
Honorary Award
The honorary award is a specific form of honorarium payment, often explicitly governed by statutes or laws, for example, within associations, chambers, or for achievements in the public interest.
Recognition Bonus
The recognition bonus must also be distinguished from the honorarium payment, as it often constitutes material consideration for a service rendered within an employment or contractual relationship.
Practical Examples and Application Cases
- Honorarium payment by a municipality for many years of voluntary service
- Honorarium payment from a foundation for outstanding cultural achievement
- One-time payment by an employer for a special anniversary of an employee, without employment law obligation
- Honorarium payment by a corporation to departing board members
Summary
The honorarium payment is a voluntary, unenforceable payment with a culturally developed legal background. It serves as moral or social recognition for special merits or circumstances and, as a unilateral grant, is not legally enforceable by classification. For tax and social security purposes, the case-by-case situation and the contractual or contribution-related context are decisive. By making a clear distinction from bonuses, salary, severance pay, and other benefits, the honorarium payment remains its own distinct form in legal life.
Frequently Asked Questions
How does the honorarium payment relate to existing employment law regulations?
In employment law, the honorarium payment exists in a special relationship to existing rules. In general, it is a voluntary payment by the employer to an employee, which is not set out in the employment contract and does not arise from a collective agreement or works agreement. It is therefore legally distinct from regular remuneration. The honorarium payment is usually granted as recognition for special services, long company service, or special occasions (such as anniversaries). A key employment law question is whether regular or repeated granting creates a legal right of the employee to future payments. Here, the principle of equal treatment under labor law applies, and if there are repeated, similar payments, a company practice could develop, which constitutes a customary law claim. Employers should therefore emphasize the voluntary nature explicitly in writing and highlight the lack of a legal claim for the future.
Is the honorarium payment subject to social security and tax?
Honorarium payments are generally subject to both tax and social security contributions if they are made in the context of an existing employment relationship and are to be regarded as income of the employee (§ 14 SGB IV, § 19 EStG). This applies even if the payment is made voluntarily and does not entitle to future repetition. An exception may only exist where the honorarium payment is effectively structured as a so-called “tax-free benefit” according to the Income Tax Act (for example, a jubilee benefit pursuant to § 3 No. 11 EStG or, under certain conditions, as a benefit in kind). In practice, the deduction of wage tax and social insurance contributions is generally required. Employers must record the honorarium payment as taxable salary in the payroll and make the relevant notifications to the social insurance agencies.
What legal requirements must be observed when granting an honorarium payment?
For the legally sound granting of an honorarium payment, several legal aspects should be observed. Firstly, the voluntary nature of the payment should be stated clearly and unequivocally to prevent the creation of a company practice and thus exclude claims to future payments. An effective voluntary provision should be documented in writing and communicated to the employee. It is also important to ensure that the honorarium payment contains no discriminatory elements, i.e., does not violate the General Equal Treatment Act (AGG) or the principles of equal treatment under employment law. The selection criteria for recipients must be understandable and objectively justified. Additionally, collective or works council regulations should be considered, as these may conflict with individual honorarium payments. Finally, tax and social security obligations, such as proper taxation and deduction of contributions, must be fulfilled.
Can an employee claim future payments after receiving an honorarium payment?
In principle, there is no entitlement to future payments of the same kind after a one-time honorarium payment has been granted, provided the employer has clearly expressed the voluntary nature. However, if repeated, similar honorarium payments are made without an effective voluntary reservation, giving the appearance of regularity, a so-called labor law customary right (company practice) may develop. In that case, employees could also claim honorarium payments in the future. A legally certain exclusion of such a claim is only achieved through an unambiguous declaration of voluntariness and an indication that there is no legal claim for the future.
To what extent is the honorarium payment subject to the principle of equal treatment?
The honorarium payment, like all other employer benefits, must comply with the principle of equal treatment under employment law. This means that there must be no unjustified disadvantage to individual groups of employees or persons when payments are granted. If, for example, honorarium payments are awarded to a specific group of employees, there must be an objective reason (e.g., company seniority, exceptional achievements, attainment of specific goals). If selection is arbitrary or discriminatory, the employer may be held liable under § 75 BetrVG or the AGG and, under certain circumstances, be required to grant the payment to other employees or to rescind an already made payment.
Must the works council be involved in the granting of honorarium payments?
Participation of the works council in honorarium payments is governed by §§ 87 Abs. 1 Nos. 10 and 11 BetrVG. If there is a works council in the company, the introduction, amendment, or distribution of honorarium payments – if it concerns a general regulation – is subject to co-determination. If, on the other hand, the honorarium payment is granted in individual cases (for an extraordinary achievement, for example), co-determination is not mandatory. However, consistent and transparent management should be ensured to avoid employment law conflicts. Where in doubt, it is advisable for the employer to involve staff representation at an early stage, especially when a larger group of employees is affected.
Can honorarium payments be reclaimed?
Reclaiming an honorarium payment is only possible under very strict legal conditions. As a rule, the payment is considered fulfilled once its intended purpose has been achieved. Repayment may be considered if it subsequently emerges that the employee obtained the payment by deception, fraud, or other intentionally false representations. If the circumstances for rescission under § 123 BGB apply, or if there was a mistake pursuant to §§ 119 ff. BGB, repayment may be possible. If the honorarium payment is tied to conditions or targets that are not met later, this must have been agreed in writing in advance and clearly defined; otherwise, recovery is difficult to enforce.
Can an honorarium payment affect maintenance or insolvency proceedings?
Honorarium payments are considered income within the meaning of maintenance and insolvency law and can therefore have consequences for such proceedings. In the context of maintenance proceedings, an honorarium payment will be considered when determining support levels, provided it is not an exception or can be clearly defined as a one-time, irregular payment. In case of insolvency, the honorarium payment in principle counts as seizable assets, provided it was payable to the employee and no explicit statutory exceptions apply. Structuring an honorarium payment specifically to circumvent such legal obligations is not permitted and may be considered collusion.
