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Employment in Germany

German employment law appears complex and confusing when looking from outside view although in some ways there are many similarities to other countries. Other factors that complicate matters include the differences between regions and an inconsistent approach to adherence to laws in different districts.   For these and many other reasons the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Germany.

Key points on employment in Germany

There are several key areas to be aware of within Germany’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department. These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the German laws and rules for both German employees as well as foreign nationals.

  1. Contracts

    Germany requires that workers have employment contracts that meet local standards, and companies must have a professional who can draft local employment contracts.

Employee Entitlements

Information Explanation
Working on Sundays ?

Under a five-day week, the average working time is between 35 and 40 hours. The daily productive working time generally may not exceed eight hours. A daily working time of up to ten hours productive working time is possible if, over a period of six months, the average daily working time does not exceed eight hours.

Working on Sundays and public holidays is generally prohibited. However, there are some exceptions

Medical Leave ?

Sick leave is available after 4 weeks of employment, and may be claimed for up to 6 weeks.

Employment Termination

Information Explanation
Termination of Employment ?

For Employees who have been employed longer than six months, unfair dissmisal protections apply. Employees can only be fired for particular reasons such as misconduct or redundancy. Employees who are on parental leave, handicapped or pregnant can not be fired without government approval.

A minimum of 4 weeks notice is required prior to termination. The notice period increases according to length of service, and after 5 years the notice period increases by one month in the 5, 8, 10, 12, and 15 years of employment.

Termination that adheres to the notice periods is Ordinary Termination.

Extraordinary Termination, which ends the employment contract immediately, may be used for serious misconduct.

Outsourcing Employment Through a GEO Employer of Record Service

Companies entering Germany can make a decision whether to use their own resources or to use a Global Employment Organization to handle employment and payroll responsibilities. A GEO solution is particularly beneficial when a company is looking to setup an office quickly with a manageable cost. The complexity of employment regulations in Germany makes the use of a GEO advisable to ensure full compliance with employment laws, including the drafting of local employment contracts for workers.

The company that is expanding into Germany contracts with the GEO to employ and payroll their staff on their behalf. The GEO then assumes the legal responsibility for these employees, sponsoring them on work permits if necessary, complying with local employment law and running their monthly payroll. This is especially useful to fulfill all of the specific withholding requirements for pensions and benefits, as well as documenting termination, probation periods and leave requests.

Germany

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