Compliantly employing someone comes with a lot of obligations and topics you have to be on top of. When you are doing that in a country foreign to you, everything will be brand new and you will have a lot of learning to do. One comprehensive and important topic is the set of local employee rights that your internationally remote worker is entitled to.
To employ someone in Germany, you need to be a registered employer. Alternatively, you can work with an Employer of Record, such as Boundless, which will employ the worker on your behalf locally. That would spare you any registrations and ensure compliance with employment law, all the while assuring harmonised experience for your employees there.
Regardless of the employment approach, all employees in Germany are entitled to the following rights.
General employee rights in Germany
Written employment contract
While a written employment contract is not one of the mandatory employee rights in Germany, employers have to provide employees with a signed document outlining the essential conditions of the employment no later than one month after the start of the employment relationship. In practice, a written employment contract that contains the terms of the employee’s compensation, benefits, and termination requirements is standard.
The employer must provide employees with payslips containing information about tax deductions and social security contributions, along with total earnings for the pay period. Online payslips are also acceptable.
According to the Safety and Health at Work Act (Arbeitsschutzgesetz), employers must assess working conditions to figure out what health and safety measures they should take.
The aspects they should look into include:
- Working space
- Operational progress
- Monitoring duties
- Necessary instructions
- Risk management
The risk assessment must reflect all activities involved and include any potential physical or psychological stress. After the evaluation, the employer must take all necessary protective measures to avoid the risks. Employers are responsible for ensuring that occupational safety and health is integrated into workplace procedures. Employees can request that the employer inform them about the health risks involved in the job.
For companies over 20 people, a qualified officer should be assigned to ensure compliance with occupational safety and health throughout the organisation. Violations can result in fines, claims for damages, and criminal charges.
One of the most important employee rights in Germany is the ability to request a reduction in their working time, but a few conditions need to be met:
- The employee has at least six months tenure with the company
- The company employs more than 15 employees
- There’s no operational reason to refuse the employee’s request
In addition, the employees should not have asked for a reduction of hours within the last two years and should give at least three months notice for their current request.
The government introduced “bridge part-time” legislation in 2019, which limits the reduction of working time to a set period (between one and five years).
Protection from discrimination
According to the Equal Treatment Act (AGG), employment relationship discrimination is prohibited based on:
- Religion or belief
- Sexual orientation
- Country of origin
However, discrimination and harassment are forbidden regardless, even outside of those characteristics.
Discrimination is any form of unequal treatment, with a few distinct types recognised by German employment:
- Direct discrimination – treating an individual less favourably because of a characteristic protected by the AGG
- Indirect discrimination – applying a policy, criteria or practice to all workers in a group, which disproportionately disadvantages those possessing an AGG protected characteristic or any other unjustified reason, unless the discrimination is objectively justified
- Victimisation – dismissing an employee because they took action related to discrimination of a protected characteristic (i.e. submitted a discrimination grievance)
Not every instance of unequal treatment is seen as discrimination. Discriminatory treatment can be justified if the employer shows important and vital work-related requirements.
Protection against dismissal
The German Termination Protection Act offers employees maximum protection against unfair dismissal as an employee right in Germany. It restricts termination of employment if the employee has been with the company for more than six months.
Termination is only possible based on:
(1) behaviour such as theft or fraud
(2) personal reasons such as long-term illness
(3) business reasons such as reducing positions due to restructuring
The employer must give a written, signed notice of termination (original is required with scan, telefax, photocopy or similar, not seen as sufficient) and observe the applicable notice period. The employer does not have to list the particular reason for termination in the termination letter. If a company lays off a lot of employees at once, prior approval by the employment office is required.
Superior protection against unlawful dismissal is extended to handicapped employees, as well as pregnant employees or employees on parental leave. In these cases, employers need to get prior approval from German authorities, which is usually very difficult to obtain. Another special protection is extended to the members of the works council (Betriebsrat) of the company.
The German Termination Protection Act doesn’t apply to companies with ten employees or less.
Protection of personal information
The EU regulation GDPR applies in Germany, granting the right to privacy and the right to determine who is to receive personal data. The employer can process personal data for:
- employment relationship purposes when deciding whether to hire someone
- managing or ending an employment relationship
- compliance with information duties under statutory law, as well as collective bargaining and works council agreements
Employee personal data may be processed when investigating criminal offences only if there is a documented reason to believe the employee has committed a crime while employed, the processing of such data is necessary to investigate the crime, and it is not outweighed by the individual’s legitimate interest in not processing it (in particular the type and extent are not disproportionate to the reason).
Even when consent has been given from an employee, it still needs to be assessed whether they gave that consent voluntarily. That assessment includes looking into the circumstances and dependencies that the employee has when it comes to having an employment relationship.
Consent is voluntary when the employee has a legal or commercial benefit or when the employer and the employee’s interests are aligned. Employees should consent to the collection of their personal information in writing unless due to the circumstances, another form makes sense.
Employee personal data may also be collected based on collective bargaining agreements or council works agreements. The processing of special categories of personal data, such as health data, is subject to additional protection.
Protection in case of a business transfer
If a business transfer occurs, the employees are automatically transferred along with the business and their years of service are carried over as well. The new employer assumes all rights and duties for them.
Employees affected by the business transfer must be notified comprehensively about certain aspects of the transfer before it happens. The employees have the right to object to the transfer within one month of receipt of this information. If an employee objects to the transfer, their employment continues with the old employer. The new employer’s right to terminate the employment is subject to the general termination protection laws.
A statutory right to severance exists only in particular cases, such as mass layoffs or a collective bargaining agreement. Before implementing a collective dismissal, the employer is obliged to inform and consult with the works council and to notify the Federal Employment Agency if:
- more than five employees are made redundant in companies with 20 to 60 employees.
- 10% of the employees or more than 25 employees are made redundant in companies with 60 to 500 employees.
- Thirty or more employees are made redundant in companies with more than 500 employees.
In practice, to avoid lengthy court proceedings employers and employees often agree on severance pay. This severance is usually 50% of the monthly salary for each year of service. This, however, can vary depending on the strength of the case for dismissal and the previous practice of the employer. Severance payment is also often part of a settlement agreement in court if the employer and the employee couldn’t come to a mutual agreement.
Employees have three weeks to bring action to the court.
To find out about all statutory benefits in Germany as well as how leading employers enhance them, download our benefits benchmark infographic.
Time off due to incapacity
One very important employee right in Germany that employers need to understand is the relief from work if the employee cannot perform their contractual duties due to physical or mental incapacity. They need to inform the employer immediately and provide a medical certificate if their illness requires them to be absent for more than three consecutive days. The employer is obliged to continue paying the employee in full for six weeks. In case the employee develops a different illness, the six-week-period restarts even if it is within the same period.
Employee representation bodies
All employees in Germany have the right to join a union or a works council. Unions negotiate collective labour agreements with the companies that feature aspects such as working time, wages, and work-related decisions. Trade union representatives support employees and works councils, but do not have participation rights within a company.
In companies that have more than five employees, the workers can elect a works council. It represents the employees and negotiates, cooperates and consults with the employer in situations such as new employee hiring, place of business changes, business closures, mass layoffs, and other. Employees have the right to be represented by a works council and gain access to information on the employer.
Want to employ someone in Germany?
Adhering to employment law and employee rights in Germany will require a commitment to learning and working with a lot of local regulations. We are here to help you on that journey and take the time to make sense of complex legislative information, which we turn into easy to understand resources on our blog.
However, staying on top of German employment law may not be a top priority for you right now. That doesn’t mean you should give up on employing your next remote worker out of Germany or opt for hiring them as an independent contractor instead (which is a bad idea).
Boundless can help you employ anyone in Germany legally and hassle-free. We own and operate a German Professional Employer Organisation as part of our multi-country offering. Through the Employer of Record model, we act as the legal employer to your remote workers and take care of the many obligations that come with adhering to these employee rights in Germany. Learn more.
The making available of information to you on this site by Boundless shall not create a legal, confidential or other relationship between you and Boundless and does not constitute the provision of legal, tax, commercial or other professional advice by Boundless. You acknowledge and agree that any information on this site has not been prepared with your specific circumstances in mind, may not be suitable for use in your business, and does not constitute advice intended for reliance. You assume all risk and liability that may result from any such reliance on the information and you should seek independent advice from a lawyer or tax professional in the relevant jurisdiction(s) before doing so.