A Comprehensive Guide to German Labour Law and Employment

In Germany, employment contracts are typically written, and they must include essential details such as the job description, working hours, and salary.

The standard working week in Germany is 35 to 40 hours, with a maximum of 48 hours per week.

German employment law requires employers to provide a written employment contract to new employees within two weeks of the start of their employment.

This contract must include the employee's job title, duties, working hours, and salary.

Related reading: Employment Contract

In Germany, employees from outside the EU/EEA need a residence title to take up employment.

If you're planning to work in Germany, you'll need to know that the statutory minimum wage is currently 12.41 EUR per hour, which applies to all employees across all sectors.

Overtime pay is not clearly defined by law, so it's usually covered in employment agreements, collective bargaining agreements, or works council agreements.

Trade union representatives are there to support employees and works councils, but they don't have any decision-making power within a company.

It's not uncommon for employment to be ended through a separation agreement due to the high level of protection against dismissal in Germany.

Severance payments are only made if certain conditions are met.

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German labour and employment law is not consolidated into a single labour code. Separate laws for particular issues exist, such as the Federal Vacation Act and the Working Time Act.

The main sources of German employment law are Federal legislation, collective bargaining agreements, works council agreements, and individual employment contracts. Many labour and employment law matters are heavily influenced by case law.

Judicial precedent is an important part of the legal framework in Germany. This means that previous court decisions can have a significant impact on current cases.

Numerous separate laws and case law generally make German employment law difficult to navigate.

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Employment contracts in Germany are typically written, but it's not strictly required by law. However, employers must provide employees with a written summary of the contractual terms within one month from the start of employment.

This summary should include the basic terms of employment, such as salary, working hours, and annual leave. It's also common for employment contracts to include a probation period of up to six months, during which employment can be terminated with shortened notice and without a reason given for the termination.

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The German Verification Act requires employers to provide employees with a written summary of key terms and conditions before their first working day. This requirement ensures transparency and clarity regarding crucial aspects of employment.

Here are the essential elements that an employment contract in Germany should include:

Note that employment contracts can be verbal, but this is not recommended as it can lead to misunderstandings and disputes.

In Germany, employment contracts are the norm, but they don't have to be in writing - although it's highly recommended. A written summary of the contractual terms must be provided to the employee within a month of starting work.

Employment contracts should include the basic terms of employment, such as salary, working hours, and annual leave. It's also common for contracts to include a probation period of up to six months.

False self-employment, or "Scheinselbstständigkeit", is a common issue in Germany, where freelancers are misclassified as employees. This can have significant consequences for both the employer and the freelancer.

To avoid false self-employment, it's essential to clearly define the terms of the employment contract, including the scope of work, payment, and any benefits or entitlements.

Here are the essential employment conditions that must be included in a written employment contract:

Employers must also provide employees with a pay slip that lists the tax amounts deducted from their gross wage.

An employment contract can include provisions that allow the employer to assign other tasks to the employee, which may also involve relocating them.

This means the employer has the power to give the employee new responsibilities, and even transfer them to a different location, without needing the employee's consent.

However, the employer must exercise reasonable judgment when making these decisions, balancing their own interests with those of the employee.

The employer's decision must take into account the employee's needs and circumstances, as well as the company's goals and requirements.

Ultimately, the employer's ability to assign other tasks or relocate the employee is a key aspect of their employment contract, and must be managed carefully to avoid any issues or disputes.

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In Germany, employees who work five days a week are entitled to 20 days of paid holiday per year. Part-time employees receive paid holiday based on their schedule, so an employee working half-time would get half the amount of paid holiday per year.

Many German employers offer more paid holiday than the minimum required, often between 25 and 30 days per year. This is a common practice in the country.

Germany recognizes ten paid public holidays per year, but some states have additional holidays, bringing the total to as many as 13.

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Self-employed women in Germany can receive daily benefits during the maternity protection period if they have taken out a private sickness cash benefit insurance.

These benefits will depend on the insurance coverage terms, so it's essential to review your policy to understand what you're eligible for.

In Germany, self-employed individuals are entitled to daily benefits during the maternity protection period if they meet certain conditions.

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This can provide a financial safety net during a critical time, allowing you to focus on your health and the well-being of your baby.

Mothers can apply for maternity benefits through the Federal Office for Social Security (Bundesamt für Soziale Sicherung), but self-employed individuals will need to follow a different process to access their benefits.

It's crucial to plan ahead and understand your options for parental leave and benefits as a self-employed individual in Germany.

Collective law plays a significant role in Germany's labor landscape, with trade unions and works councils being key players.

Trade unions are organized by sector, not by political orientation or job type, and have a history dating back to the German revolution in 1848. Approximately 80% of employment relationships are subject to collective bargaining agreements.

Trade unions negotiate pay and working conditions with employers' associations, including notice periods and employment protection for employees with long service. They may also initiate the election of works councils.

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Employers in Germany have limited freedom to dismiss employees, with the Dismissal Protection Act restricting their ability to terminate contracts. An employer can only give notice to terminate if the termination is justified by reasons relating to the employee's person, conduct, or urgent operational requirements.

If the employer and works council agree on a list of employees to be dismissed, social justification is presupposed and can only be challenged in court on the grounds of gross misjudgment.

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In Germany, a collective bargaining agreement is a written contract between one or more employers or employers' associations and one or more trade unions. This agreement contains provisions on the content, conclusion, and termination of employment relationships as well as on operational and works constitutional issues.

Collective bargaining agreements set minimum working conditions, so that more favorable provisions for employees can be regulated in the employment contracts. The provisions set forth in a collective bargaining agreement apply directly and in mandatory form to an employee if they are a member of a trade union and the employers themselves have concluded a collective bargaining agreement with said union or are a member of an employers’ association which concludes collective bargaining agreements in their name.

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In practice, where collective bargaining agreements are implemented, employees who are not organized in trade unions are usually treated in the same way as unionized employees. This means that even if an employee is not a member of a trade union, they can still benefit from the provisions of the collective bargaining agreement.

A collective bargaining agreement can be agreed between the employer and the employee in the employment contract. This is often the case, especially if the employer has not concluded a collective bargaining agreement with a trade union.

The following table illustrates the key aspects of a collective bargaining agreement:

Collective bargaining agreements have a significant impact on employment relationships in Germany. They set the minimum working conditions and provide a framework for employment contracts. Employers and employees should be aware of the provisions of the collective bargaining agreement and how it applies to them.

German labor law provides comprehensive protections and rights to employees, but did you know that hiring freelancers or contractors can be a popular alternative to hiring employees?

Employers often prefer freelancers because they don't have to comply with strict employee protection regulations, such as rules on fixed-term contracts, protection against unfair dismissal, holiday entitlement, etc.

However, freelancers can be misclassified and actually qualify as employees, which is known as false self-employment (Scheinselbstständigkeit) in German law.

Under German law, a "false self-employment" occurs when an individual works as a freelancer or contractor but, in reality, is more akin to an employee regarding their work conditions and relationship with the company.

This can have significant negative consequences for the employer, as they may be held liable for employee protections and benefits.

Employers must be aware of the differences between freelancers and employees, and ensure that they are not misclassifying workers to avoid these regulations.

In fact, German labor law requires employers to provide employees with a written summary of the contractual terms within one month from the start of employment, which can be a good practice for freelancers as well.

Employment contracts in Germany often include a probation period of up to six months, during which employment can be terminated with shortened notice and without a reason given for the termination.

In Germany, pregnant women have strong protections in the workplace. Dismissal of a pregnant woman is unlawful, and this protection extends until four months after delivery under the Maternity Protection Act.

Employers are required to evaluate the workplace for hazards that could affect pregnant or breastfeeding employees and develop a plan to avoid these hazards.

If you're experiencing workplace issues, you can turn to your works council or trade union for assistance in resolving the dispute. They can provide valuable support in navigating the situation.

Under German law, employers are obliged to refrain from discrimination and take steps to protect employees from discrimination at the workplace. This includes prohibiting direct and indirect discrimination, as well as victimization.

In Germany, works councils have a broad range of participation rights in various matters, including personnel, social, and economic issues. The Works Constitution Act provides this framework.

Works councils have comprehensive co-determination rights in social matters, which include company rules, working hours, and remuneration schemes. The employer must obtain the consent of the works council before implementing a decision concerning a social matter.

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If no agreement can be reached, a conciliation body must be put in place, and if no agreement is reached even after further negotiations, this conciliation board will make a final decision. This process can be time-consuming and costly.

Works councils have the right to be involved in personnel matters, such as personnel planning and the introduction of employee questionnaires. The employer must inform the works council before hiring or transferring an employee and submit necessary documents.

The employer is obligated to obtain the consent of the works council for certain personnel measures, and if the works council refuses its consent, the employer must obtain it in court. This can be a lengthy and costly process.

Operational changes, such as the reduction of operations or closure of the entire operation, require works council negotiation prior to implementing the measure. The employer and works council must negotiate a reconciliation of interests and agree on a social plan.

Here are some examples of operational changes that require works council negotiation:

In summary, works councils play a crucial role in Germany's employment law framework, and their rights and responsibilities are complex and far-reaching.

In Germany, the average working hours per day is 8 hours, which can be extended to up to 10 hours for a short period.

Working hours in Germany can vary, but office hours typically start as early as 08:00 and end as late as 18:00.

A single workday may not exceed 10 hours of work, and overall work hours cannot average more than eight hours per day over a six-month period.

Germans average 34.6 hours of work per week, which is relatively low compared to other countries.

By law, working days in Germany include Monday to Saturday, and only limited sectors allow work on Sundays.

If an employee works on a Sunday, they must receive equivalent time off.

Daily working hours must not exceed eight hours per working day, and based on six working days per week, employees must not work more than 48 hours per week.

However, this can be extended to up to ten hours per working day, if within six months or 24 weeks, the average working time does not exceed eight hours per day.

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Employees who work longer than 6 hours a day must take a break of at least 30 minutes, while those who work longer than 9 hours a day must take a break of at least 45 minutes.

There must be at least 11 hours of uninterrupted rest between the end of a daily working period and the start of a new daily working period.

Working on weekends and public holidays is generally prohibited, but there are exceptions for employees in certain areas, such as emergency and rescue services.

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In Germany, pregnant women have significant protections against dismissal, with the Maternity Protection Act extending this protection until four months after delivery.

Pregnant women have the right to a safe working environment, and employers are required to evaluate the workplace for hazards that could put them at risk.

Employers must develop a plan to avoid these hazards and provide alternative work and breaks as needed.

Mothers are entitled to maternity leave, starting six weeks before the due date and continuing up to eight weeks after childbirth, which can be amended in some cases.

During maternity leave, mothers receive their full salary, and the government pays a maternity allowance up to a set amount, with any difference paid by the employer.

New fathers will automatically receive two weeks of paid paternity leave starting in 2024, following the birth of their child.

Self-employed women who have taken out private sickness cash benefit insurance are entitled to daily benefits during the maternity protection period.

In Germany, employers are required to refrain from discrimination and take organizational measures to protect employees from discrimination at the workplace. This is in accordance with the General Equal Treatment Act (AGG).

Direct discrimination is prohibited under the AGG, and examples include job advertisements with discriminating age limits or the dismissal of a woman because of pregnancy. Indirect discrimination can occur when seemingly neutral criteria are applied, which in reality have a more negative effect on certain groups.

Harassment is also considered a form of discrimination, including unwanted conduct of a sexual nature, such as staring or suggestive comments. Bullying is another form of harassment that can take place in the work environment, involving actions that violate a person's dignity and are targeted towards them.

Under the AGG, victimization is also prohibited, which means that a person cannot be treated less favorably because they have exercised their rights or refused to comply with an instruction to discriminate against another.

In Germany, the rules around terminating employment are quite strict. Employees enjoy strong protection against termination, and there are specific requirements that employers must follow.

A notice of termination is only valid if it can be proven to have been handed over, either in writing and signed by both parties, or witnessed by a third party. This means that emailing a notice of termination is not considered valid.

The notice period increases with the time the employee has worked for the employer. For example, those with less than two years of work history must be given at least four weeks' notice, while employees with 10 to 11 years of history must be given at least four months' notice.

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If the employer and the works council manage to agree on a list of workers to be dismissed, social justification is presupposed and can only be challenged in court on the grounds of gross misjudgment.

Here's a summary of the notice periods for termination:

Employers are required to give employees notice of an employment termination regardless of the reason for termination.

In Germany, a post-contractual non-compete restriction can only be stipulated effectively if it doesn't lead to an unreasonable impediment regarding the employee's future business activities.

A post-contractual non-compete covenant can only be agreed for a maximum period of up to two years after the termination of the employment relationship. This is a crucial point to consider when drafting such an agreement.

The company's area of operation must be specified in terms of business and geographical scope. This ensures that the restriction is clear and enforceable.

To make a post-contractual non-compete covenant valid and enforceable, a compensation payment of at least 50% of the formerly received contractual remuneration must be agreed. This includes base salary, variable payments, and benefits in kind.

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Termination in Germany is a complex process, but I'll break it down for you.

In Germany, employees enjoy strong protection against termination, which is divided into general and special protection. General protection applies to all employees, while special protection applies to certain groups, such as severely disabled employees and women during pregnancy and four months after childbirth.

To terminate an employment contract, a notice period must be observed, which varies depending on the length of service. For employees with less than two years of service, a minimum of four weeks' notice is required, while employees with 10 to 11 years of service must be given at least four months' notice.

A notice of termination is only valid if it's in writing and signed by both parties, or if a witness was present when notice was given. Email notice of termination is not considered valid.

An open-ended contract, which has no set end date, is standard in Germany and can only be terminated with formal notice.

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If the Dismissal Protection Act (DPA) applies, dismissal must be justified with an acceptable reason, and most general employee conduct reasons require a written warning to the employee before dismissal.

Notice periods increase with the time the employee has worked for the employer, ranging from four weeks for employees with less than two years of service to four months for employees with 10 to 11 years of service.

Here's a summary of the notice periods:

Freelancers do not receive the same protections as employees and must agree on a notice period in their contract.

If an employee believes their dismissal is invalid, they can file an action for unfair dismissal within three weeks of receiving the letter of dismissal.

In Germany, the freedom of the employer to dismiss an employee is substantially restricted if the employer employs more than 10 employees and the employee has been employed for more than six months.

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In Germany, redundancy and restructuring are common practices in the business world. A redundancy dismissal has to be based on compelling business reasons, meaning the employer must prove that the job no longer exists and there are no vacant positions in the company.

Employers are required to conduct a selection process among comparable employees before selecting one for redundancy. They may also need to consult with their works council on an operational change. Although employers are not required to provide redundancy pay, it's sometimes offered, with the amount determined by the plan agreed upon between the employer and the works council.

Employers must notify the unemployment agency if they make more than a threshold number of employees redundant. This is a crucial step in the redundancy process.

Companies carry out restructuring to improve their competitiveness, avoid future crises, or overcome existing ones. During a crisis, reducing the workforce is often inevitable. In most cases, restructuring meets the criteria of an operational change, a pivotal legal concept in German labour law.

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Operational changes include reducing operations, closing departments, relocating the entire operation, merging or splitting operations, or introducing new working methods and production processes. This concept applies to companies with more than 20 employees and a works council.

The employer and the works council must negotiate a reconciliation of interests and conclude a social plan if an operational change is to be implemented. The works council must be informed and consulted about operational changes at an early stage. Failure to do so may result in the employer being unable to implement the measures.

A social plan is an agreement between the employer and the works council on compensating or mitigating the economic disadvantages suffered by employees due to operational changes. The core element of social plans is severance payments, with other benefits including relocation allowances, additional payments for severely disabled employees, and re-training services.

Here's a summary of the key steps in the redundancy and restructuring process:

Social security contributions in Germany are paid on employment income to support pension insurance, unemployment insurance, health insurance, and long-term care insurance. Employers also make additional work accident scheme and insolvency contributions.

Employers pay social security contributions, but self-employed individuals generally don't have to pay these contributions. However, they're not eligible for benefits like unemployment.

Income taxes in Germany are assessed on a banded scale, with bands ranging from 0% for income up to €10,347, to 45% for income at €277,826 and above (effective 2023).

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In Germany, labor law prioritizes employee safety in the workplace. German labor law protects employees in the workplace through a variety of health and safety laws, such as the Occupational Safety Act (Arbeitsschutzgesetz), which requires employers to appoint occupational physicians to advise on accommodating employees with disabilities.

Employers must also equip employees and operate their business to maintain safety, as regulated by ordinances like the Workplace Ordinance (ASR) and the Hazardous Substances Ordinance (Gefahrstoffverordnung – GefStoffV).

Daily working hours in Germany are regulated by law to ensure a healthy work-life balance. The maximum working hours per day are eight, with the possibility to extend to up to ten hours in certain cases.

Employees who work longer than six hours a day must take a break of at least 30 minutes. Those who work longer than nine hours a day must take a break of at least 45 minutes. This is to give them time to rest and recharge.

The works council has a right of co-determination regarding the beginning and end of daily working time, including breaks, and the distribution of working time over the individual days of the week. This means that employees have a say in how their working hours are structured.

There must be at least 11 hours of uninterrupted rest between the end of a daily working period and the start of a new daily working period. This allows employees to get a good night's sleep and wake up feeling refreshed.

Working on weekends and public holidays is generally prohibited, except in certain sectors such as emergency and rescue services, catering, and hotels. However, work on Sundays must be compensated by corresponding time off within the following two weeks or eight weeks in the case of work on public holidays.

In Germany, employees are entitled to receive 100% of their salary for up to six weeks if they're unable to work due to illness.

This generous sick pay policy is designed to support employees during their recovery period. Employees who need to take time off work to care for a sick child can receive paid time off from their employer or apply for child sickness benefit.

Employers in Germany can ask for a doctor's note immediately after any sickness absence, but most require this only when sickness lasts more than three days. This allows employees to take care of themselves without unnecessary bureaucracy.

If an illness lasts longer than six weeks, employees can continue to receive a sick allowance from either the national health insurer or a private insurer, but the allowance will not exceed 70% of their salary. This allowance can be paid for up to 78 weeks.

In some cases, employees may be entitled to full pay during the first six weeks of each period of illness, after which they can receive sick pay from the state health insurance fund. This is the case for employees who have at least four weeks' continuous employment.

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In Germany, labor law prioritizes employee safety in the workplace. Employers are required to appoint occupational physicians to advise on accommodating employees with disabilities.

The Occupational Safety Act (Arbeitsschutzgesetz) is a key law that regulates workplace safety. It's enforced to ensure employers take necessary precautions to prevent accidents and injuries.

Employers must equip employees with the right safety gear and follow specific guidelines to maintain a safe working environment. This includes adhering to ordinances like the Workplace Ordinance (ASR) and the Hazardous Substances Ordinance (Gefahrstoffverordnung – GefStoffV).

These ordinances outline specific requirements for employers to follow, such as providing proper training and equipment to prevent accidents involving hazardous substances.

In Germany, vocational training opportunities are plentiful and varied. You can find apprenticeships listed in the Federal Employment Agency (Bundesagentur für Arbeit) job listings.

German law requires training programs to offer pay, as well as all necessary equipment, during training. This ensures that apprentices receive a fair compensation for their work.

In Germany, employees often turn to their works council or trade union for assistance with resolving disputes, as these entities can provide valuable support.

Employees who need to file a claim for discrimination can do so through the Federal Anti-Discrimination Agency (FADA).

For many employees, seeking help from their works council or trade union is the first step in resolving a workplace dispute.

Council costs can be a significant burden for employers. The employer bears the costs resulting from the work of the works council.

Employers must provide the works council with offices and equipment as necessary for the performance of the works council's duties. This includes necessary training expenses for works council members.

Comprehensive training on works council constitution law is required for each member, and these expenses are not insignificant. The employer must also bear the costs of legal advice from a lawyer if the works council considers it necessary.

Employers are obligated to pay the works council members the customary remuneration during the time in which the works council work is completed. This includes all legal disputes with the works council in court.

In Germany, making a complaint as a worker can be a straightforward process. Many employees first turn to their works council or trade union for assistance.

If the Anti-discrimination Act has been violated, the affected employee has a claim for compensation against the employer. This can include financial damages under section 15 AGG.

Employees can file a claim for discrimination through the Federal Anti-Discrimination Agency (FADA). This agency provides support for resolving disputes related to discrimination.

The employer may be liable for actions that violate the prohibition of discrimination, even if colleagues or non-employees are involved. This can happen if the employer has not taken measures to protect against discrimination.

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Employers in Germany have a responsibility to ensure that their workplace is free from discrimination. This means they must not discriminate against job applicants or employees based on factors such as gender, race, religion, age, disability, or sexual orientation.

Employers must also take measures to prevent discrimination from occurring in the workplace. This can include transferring employees who discriminate against their colleagues or giving them a reprimand. In extreme cases, termination of employment may be necessary.

Employers are prohibited from publishing job advertisements that discriminate against certain groups. For example, an advertisement seeking a "friendly young waitress" would be considered discriminatory. Similarly, asking a female job applicant about her plans for a family during a job interview would be unfair.

If a company plans a merger or takeover, they must notify the target company's works council of their decision to submit an offer, unless there is no works council, in which case the notice goes to all employees.

Employees who are affected by a company's insolvency are still entitled to receive their wages through their applicable notice period.

If an employer fails to pay the remaining wages, employees can apply for compensation through the Federal Employment Agency.

German companies have specific rules to follow when it comes to mergers and insolvencies, which are designed to protect employees' rights.

Business Transfer is a significant event in a company's life cycle, and it's essential to understand the implications for employer obligations. Business sales and restructuring often qualify as a transfer of business according to the German TUPE provision.

In Germany, business transfers that involve selling or spinning off unprofitable operations into shared service centers or subsidiaries can trigger employer obligations. This is because such measures are considered a transfer of business under section 613a of the German Civil Code (Bürgerliches Gesetzbuch – BGB).

As a result, employers must consider the rights and protections of affected employees, including their employment contracts and working conditions.

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Employers must provide their employees with a written and wet-signed summary of the respective essential employment conditions, as per the Verification Act.

This summary must contain the name and address of the contracting parties, as well as the date of commencement of the employment relationship.

Employers are prohibited from discriminating against job applicants and employees on the basis of gender, race or ethnic origin, religion or belief, age, disability, or sexual orientation.

Employers must observe the ban on discrimination when publishing job advertisements and during the application procedure.

A job advertisement seeking a "friendly young waitress" demonstrates two forms of discrimination: the term "young" is a form of discrimination on grounds of age, while the female form "waitress" can be equated with discrimination on grounds of sex.

Employers must ensure that discrimination does not take place and take measures against employees who discriminate against other colleagues.

Here's a summary of the prohibited grounds for discrimination:

Employers must also observe the ban on discrimination during job interviews, avoiding questions that could be seen as discriminatory, such as asking a female applicant about her plans for a family.