Coverage of criminal defense attorney fees: When employees can demand reimbursement from their employer

When employees are unexpectedly confronted with criminal charges, the question quickly arises as to who will bear the sometimes considerable costs of a defense. Many people are unaware that, under certain circumstances, employees are entitled to have their legal fees covered by their employer. This entitlement always applies if the charge is clearly related to the employee's professional activities.

In larger organizations in particular, employees may be involved in processes that carry criminal risks without being able to assess these risks. If an investigation is subsequently launched, the focus is often on those who acted within the scope of their duties or who bear responsibility due to their operational responsibilities. The fact that the actual source of the problem is organizational or structural in nature often only becomes apparent in the course of the proceedings.

A claim for reimbursement of costs may exist, in particular, if the alleged actions were work-related, internal processes played a role, or the employer benefited from the employee's activities. The decisive factor is the close connection between the professional task and the criminal charge. The presumption of innocence applies, of course, but the employer must still assume responsibility at this stage.

What employees should look out for in cost coverage agreements

It is not uncommon for employers to respond to investigations at an early stage and offer to cover the initial costs of defense. Such offers can provide significant relief, but should never be accepted without prior review. Agreements of this kind often contain maximum limits, restrictions on the specific investigation procedure, and specifications on how and to whom the lawyer bills.

Tax issues also play a role: many agreements explicitly state that the costs covered are to be treated as wages subject to tax and social security contributions. Repayment clauses in the event of a subsequent conviction are also common. For legal laymen, it is often difficult to understand how far-reaching such regulations actually are. Especially in stressful situations, there is a high risk of signing prematurely – with consequences that only become apparent later.

This makes it all the more important to have such agreements reviewed in advance. A clear contractual basis not only protects employees financially, but also strengthens their position in defense.

The role of the criminal defense attorney in enforcing the assumption of costs

Few of those affected are aware that enforcing cost coverage is not left to their own initiative. All communication—from reviewing a submitted agreement to negotiating the scope and clarifying open questions—is usually handled by the criminal defense attorney. This significantly reduces the burden on employees and prevents additional risks from arising due to ambiguities.

At ROSTALSKI, we review, negotiate, and enforce legitimate claims directly with the employer. At the same time, we keep an eye on the labor law, tax, and tactical aspects that are crucial for an effective defense strategy.

Advising employers: Creating legal certainty and minimizing risks

Employers also face difficult decisions in such situations. As soon as investigations are launched against an employee, legal uncertainties arise—whether in terms of the duty of care, the tax treatment of cost coverage, or potential reputational risks. Out of a sense of responsibility or for internal clarification, many companies voluntarily offer to cover costs without being able to fully assess the long-term consequences.

This is precisely when professional advice is essential. Employers need to know what costs they are allowed to bear, what limits are reasonable, and how agreements can be structured in such a way that they remain legally compliant and practicable at the same time. In addition to tax issues, this also includes labor law consultations, internal investigations where necessary, and dealing with investigative authorities in the right way.

We support employers in creating clear structures and minimizing cost risks—whether by drafting customized cost coverage agreements, reviewing tax implications, or providing support in sensitive personnel and organizational matters. The aim is to protect both the company and the employees concerned from additional burdens.