The same in Germany. The people can be easily classified as bogus self-employed (scheinselbststaendig). The company would have to pay social security contributi

The same in Germany. The people can be easily classified as bogus self-employed (scheinselbststaendig). The company would have to pay social security contributions retroactively up to 4 years. Furthermore, the 'contractors' could sue their way into employment. Also, workarounds mentioned elsewhere, like employment as temp by utilizing intermediate staffing companies, became widely known in time also to government agencies. Most companies will fire/replace such staff after 18 month max for this reason.