Staff - Germany

Updated 07/2012

Legal requirements

The basis for staff management in Germany is laid down in the Civil Code (Bürgerliches Gesetzbuch).

Civil Code (Bürgerliches Gesetzbuch – BGB)

Employment in Germany works on the basis of collective agreements, depending on the sector concerned. These are contracts between the parties involved, individual employers, employers’ federations and trade unions. They are governed by the Collective Agreement Act.

Collective Agreement Act

Employment conditions

Working hours are regulated by the Working Time Act.

Working Time Act (ArbZG) [64 KB]

Labour protection and safety at work are regulated by the Labour Protection Act.

Labour Protection Act (ArbSchG)

There are certain rules regarding the termination of employment. In businesses with more than ten employees, dismissal in social terms is considered invalid (i.e. if the reason is not related to the person or their conduct or is not driven by business needs). Both you and your employees have to stick to the established notice periods. You can only carry out summary dismissal if there is a compelling reason to do so.

Employment Protection Act (KSchG), Civil Code

In the case of statutory protection against dismissal, a distinction is made between general protection against dismissal, which applies to all employees who fall under the scope of the Employment Protection Act, and special protection against dismissal for groups of individuals who are particularly vulnerable (e. g. pregnant women and new mothers - § 9 Maternity Protection Act (Mutterschutzgesetz), and employees taking parental leave - § 18 Parental Allowance and Parental Leave Act (Bundeselterngeld- und Elternzeitgesetz)).

Rules on leave are to be found in the Federal Holidays Act.

Federal Holidays Act (BUrlG)

Rules on protecting people under 18 are contained in the Youth Employment Protection Act.

Youth Employment Protection Act

Employment contracts

You and your employees are bound by the employment contracts you draw up, whether these are oral, tacit or written.

A written employment contract has to contain details such as:

wage/salary;
probationary period and working hours;
number of vacation days;
permission to take secondary employment/restrictions in view of competition;
the duration of the contract.
What should an employment contract contain? [56 KB]

Even in the case of an informally concluded contract, you are required to notify your employees in writing no later than one month after the individual begins working for you of what the basic contractual conditions are (e.g. who the contract involves, its duration, description of activities, place of employment, working hours, salary, holidays, notice periods, reference to the collective agreements applicable to the employment relationship, employer/works council agreements, etc.). The rules on this can be found in the:

Act on the duty to inform employees of employment conditions of an employment contract

There are various types of contract, such as:

permanent Employment contracts;
temporary employment contracts;
Part-time contracts;
Contracts with freelance workers.

Employing foreigners

Non-EU nationals have to have a residence permit saying whether they are allowed to hold a paying job in the country.

Residence Act
Leaflet: Employing foreign workers in Germany [189 KB]
Legal provisions and leaflets from the employment agency
Make-it-in-germany

There are minimum social rules to follow, especially about non-discrimination, gender equality and health and safety.

Staff welfare — Germany

Administrative procedures

Social security contributions

You are obliged to notify the social security bodies of all the staff you employ.

Social security notification procedure
Social security: Employers’ reporting obligations
Employers: How to insure your employees
German Pension Fund Union

Social security notifications

New employees must be registered with the health insurance (collecting office). The application must be made with the first payroll run, no later than six weeks after the first day of employment.

Registration

Since 1 January 2009 a new 'fast-track registration obligation' has applied to business sectors in which experience has shown illicit working and illegal employment to be particularly widespread. Fast-track registration, which involves only four items of data, in the listed sectors must be done no later than by when employment starts. The next wage slip is the normal way of registering, in place of fast-track registration.

Fast-track registration
Fast-track registration: FAQs

If an employee ceases to work in the business, this must be notified to the collecting office. This must be done with the next payroll run, and no later than six weeks after the end of the employment. The de-registration must state the duration of employment in the current calendar year and the earnings liable for contributions.

De-registration

Also notice of interruption e.g. where a period of employment is interrupted, possibly by illness, must be reported. The assumption is that the employee has received sick pay for at least a full calendar month (and since 1 January 2008, a daily sickness allowance also).

Notice of interruption

For each employee who has been working longer than 31 December of a year, an annual return must be submitted. This is due with the next payroll run, but must be provided by 15 April of the following year. From 2009 onwards, these details also have to be reported to the accident insurance provider.

Annual return

Residence permits for foreign workers

The residence permit is issued by the relevant department or a German representation abroad.

However, a person may be employed in Germany only if the Agency for Labour or the German representation abroad first gives its permission for hiring to take place or its approval for employment.

Employing foreign workers in Germany
Make-it-in-Germany

Resources

Allowances may be granted in Germany for new recruitments where a new business is starting up, for example. Brochures offering further guidance in this matter are available:

Integration allowance for new business start-ups
Other types of allowance
Financial aid at a glance [1 MB]

Staff may be recruited through friends or relations, vacancy notices, online exchanges, universities or colleges or the Employment agency, among other places.

Employment agency
Job exchange
Staff selection
Looking for staff

EURES, the European job portal, offers employers information and support on recruiting across the EU. As well as assisting jobseekers, it helps entrepreneurs find workers from across the EU. In border regions, EURES provides information on cross-border commuting and helps workers and employers with problems that may arise.

Check also the legislation on this topic in:

Staff - Germany