Germany Labor Management QA

Email: fra4ww@evershinecpa.com
The Engaging Manager from Headquarter
Ms. Anna Wang, Speak German, English and Chinese.
skype: burlinna

LRC – Germany Labor Regulations

LRC-DE-20.10
What must be included in the contents of a labor contract in Germany?

Evershine RD:
According to Law of Proof of Substantial Conditions Applicable to the Employment Relationship, 1995, SS 1-3.
An employment contract must include at least:

1. 1. the employer’s and the employee’s names and addresses.
   2. the date work commenced.
   3. a job description.
   4. the place of work.
   5. the weekly hours of work.
   6. the amount and method of payment.
   7. leave entitlement.
   8. the required notice period.
   9. reference to applicable collective agreements.
   10. length of service if the employment contract is concluded for a fixed term.

In addition to this mandatory content, it is in the employer’s interest for the employment contract to include:

1. a probationary period.
2. a provision that enables the employer to assign the employee to other tasks within the company in accordance with his or her capabilities and knowledge.
3. a provision on how to deal with overtime working hours.

LRC-DE-20.11
Does Germany arrange labor contract in fixed term?
What should be the length of the labor contract in Germany?

Evershine RD:
Most contracts are established for an indefinite period.
In principle, fixed-term employment contracts are also allowed.
The contract must not exceed 18 months and the employee has not worked for the same employer during the previous three years, or
The fixed term is justified by a sufficient cause and does not lead to a circumvention of the rights granted by the Act on Protection Against Unfair Dismissal.
Fixed-term contracts can be extended only one time.

LRC-DE-20.20
What is the minimum age for hiring a new employee in Germany?

Evershine RD:
According to Young Workers Protection Act, 1976.
The legal minimum age for employment in Germany is 15.

LRC-DE-20.40
Is it a requirement for employer in Germany to conduct a pre-employment background check?

Evershine RD:
Unless specified in the contract as a condition of employment, an applicant is not required to undergo psychological testing or a medical examination before employment unless required by law (e.g., in the food sector) or under the accident prevention regulations.
In tests and medical examinations, no questions may be asked that an employer would not be allowed to ask (e.g., about pregnancy or medical history)

LRC-DE-20.50
Is the Non-Competition indemnity clause in labor contract in Germany has legal effect?

Evershine RD:
According to Commercial Code, 1897, S 74.
For the duration of employment, the employee is prohibited from entering competition with the employer.
Business activities outside the employer’s sector are thus allowed even without the employer’s consent provided that the secondary employment is not inadmissible for other reasons.
A post-employment noncompetition agreement can only be enforced if it:

1. is in writing and one original has been presented to the employee.
2. serves to protect only the reasonable interests of the company and does not represent a disproportionate hindrance to the employee’s career in temporal, geographical or substantive terms and
3. does not exceed two years, and
4. requires the employer to pay compensation for the duration of the prohibition of not less than 50 percent of the final annual salary of the employee for each year of prohibition.

LRC-DE-40.05
What are the regulations on Gender Discrimination in employment specifically for female workers in Germany?

Evershine RD:
According to General Equal Treatment Act, 2006, S1.
Employers may not discriminate against employees or prospective employees based on race, ethnic origin (language, culture, tradition, customs, etc.), gender, disability, age, religion, or ideology (including political or other beliefs) and sexual orientation/identity.
German employment law contains provisions that protect employees against discrimination and harassment.

LRC-DE-50.10
Can the employer in Germany collect, or process data transmitted by employees over the internet?

Evershine RD:
According to General Data Protection Regulation, 2016.
Under the GDPR, employers can monitor employees only if there is a lawful basis for doing so.
Lawful bases can include preventing employee misconduct, deterring crime, and ensuring compliance with health and safety procedures.
Employees must be given prior notice, and any data that is collected must be used and kept only to fulfill its original purpose.
Covert employee monitoring can only be conducted if it is based on a specific suspicion that an employee has committed a severe breach of contractual duty or a crime.

LRC-DE-60.10
What are the regulations on working hours in Germany?

Evershine RD:
According to Working Hours Act, 1994, No. 33, SS3-6.
Work hours cannot exceed 8 per day and 48 per week, as the workweek is defined as Monday to Saturday.
The act allows work hours to be extended up to a maximum of 10 hours per day, if over 6 calendar months or within 24 weeks an average of 8 hours per working day is not exceeded.
Employees must not work for more than 6 consecutive hours without a break.

LRC-DE-60.30
What are the regulations on overtime hours in Germany?
What is the overtime premium rate in Germany?

Evershine RD:

Employees can be required to perform overtime work only if there is a provision in the employment agreement or in a collective bargaining agreement giving the employer that right.
There is no legal provision for premium pay.
Overtime pay is not required or regulated by statutory law, and in principle it is possible to have some overtime work included in monthly remuneration.
Overtime need only be compensated if it occurs regularly and is necessary to fulfill the workload given the employee or if the employer requires overtime.
Otherwise, overtime may be compensated by granting additional time off.

LRC-DE-60.50
Is it common to pay 13^th month’s salary in Germany?

Evershine RD:
While labor law does not require the payment of bonuses in addition to wages, various sorts of bonuses are commonly provided by German employers.

These include:

1. gratuities
2. profit sharing
3. supplemental pay
4. commissions
5. piecework rates

LRC-DE-70.10
What are the regulations on general leave policy for employee in Germany?

Evershine RD:
According to the Federal Paid Leave Act, 1963, SS 3-4, 7-8, 11.
Every employee working 6 days a week is entitled to at least 24 working days of vacation (i.e., 4 weeks), employees working 5-day weeks 20 days.
Employees are eligible for their full vacation entitlement if they have been employed for at least 6 months.
At present, 5 to 6 weeks annual vacations are typical.

LRC-DE-70.20
What are the public holidays in Germany?
What is the overtime premium rate during public holiday in Germany?

Evershine RD:
According to Working Hours Act, 1994, No. 33, S 11.
Germany observes the following ten national holidays, the dates of some of which vary year to year:

•  Jan. 1: New Year’s Day
•  Good Friday
•  March 8: Women’s Day
•  Easter Monday
•  May 1: Labor Day
•  Ascension
•  Whit Monday
•  Oct. 3: German Unity Day
•  Dec. 25: Christmas
•  Dec. 26: St. Stephen’s Day

There are also holidays specific to individual regions.
Holidays are always observed on the day on which they fall, even if they fall on a weekend.
Holidays are not moved to the nearest Monday, nor do workers get a free day in compensation for a holiday failing on a nonwork day.
If employees are required to work on a holiday which falls on a working day, they must have a day rest in compensation which must be granted within a period of 8 weeks including the day on which they worked.
Employees are not entitled to extra pay if they are required to work on a public holiday.

LRC-DE-70.30
What is the maternity leave policy for female employee in Germany?

Evershine RD:
According to Maternity Protection Act, 2000, SS 3, 6, 9-10.
An expectant mother must not be employed during the 6 weeks prior to the birth of her child.
Following the birth of the child, the mother has a right to parental leave until the child reaches the age of 3.
A woman who has given birth must not be employed for 8 weeks thereafter.
This is extended to 12 weeks for premature or multiple births, or if the child is born with a disability.
The leave entitlement starts on the day of birth and ends 8 or 12 weeks later the same day of the week as the day of the birth.
The Maternity Protection Act ensures that as a rule female employees suffer no financial disadvantages because of maternity.
On return from maternity leave, the employee is guaranteed her previous job.
Employers cannot dismiss an employee who has a miscarriage after the 12-week of her pregnancy, for a period of 4 months.

LRC-DE-70.40
What is the paternity leave policy for male employees in Germany?

Evershine RD:
According to Law on Parental Allowance and Parental Leave, 2015, SS 15-18.
There is no leave benefit specific to fathers, although either parent may take advantage of parental leave.
A child-raising benefit is paid by the government from the child’s birth to the age of 12 to 14 months.

LRC-DE-70.50
What are the provisions on sick leave, bereavement leave and personal leave for employees in Germany?

Evershine RD:
According to Continued Remuneration Act, 1974, S2.

Sick leave

In the event of incapacity for work without any fault on their part, the Continuation of Remuneration Act gives employees the right to receive sick pay up to 100% of salary for 6 weeks.
Employees are entitled to continuation of salary after employment of 4 weeks.

Nursing care leave
Employees are entitled 10 days leave to take care of close relatives who are in urgent need of care.
The leave of absence is unpaid, unless stated otherwise in a collective bargaining agreement.
Employees also can take nursing care leave up to 6 months for a close relative.
The employee must give the employer at least 10 working days’ written notice prior to the commencement of the leave.
This entitlement applies only to employees working for companies with more than 15 employees.

LRC-DE-70.60
What are the regulations on pension benefits and social security insurance benefits for employees in Germany?

Evershine RD:
According to Social Security Code, Sixth Book, 1989, S36.
For persons born before 1965, the legal retirement age is currently 65 with at least 5 years of contributions and will gradually increase to 67 by 2020.
For persons born after 1964, the pensionable age is already 67 with at least 5 years’ contributions.
Employees who have paid into the pension fund for at least 45 years can retire at 63 with no reduction in benefits.
Employers and employees make equal contributions of roughly 20% of gross monthly salary to the statutory pension insurance system.
In Germany, there is a national social security system, to which employees belong by law.
The employer is required within 14 days to report to new hire to the competent health insurer.
The social security system covers:

• Health insurance
• Unemployment insurance
• Nursing care insurance
• Pension or old-age benefits and
• Accident insurance

LRC-DE-70.70
What are the regulations on Workers’ Compensation for employees in Germany?

Evershine RD:
According to Social Security Code, Fifth Book, 1989, S 3(3).
Employers make contributions to the employee accident insurance system, which is administered by associations set up for all branches of trade and industry.
Contributions vary according to an individual employer’s accident record.
This also covers accidents occurring while employees are commuting between home and their places of work.

LRC-DE-80.05
Can employees in Germany join labor union?

Evershine RD:
According to Basic Law, 1949, S 9(3); Act on Collective Agreements, 1949.
Employees can join any union they want but only benefit from membership if the union they join signs the collective agreement with their employers.

LRC-DE-80.06
How to handle labor dispute in Germany?

Evershine RD:

According to Basic Law, 1949, S 9(3).
There are no specific rules that employees and employers who are members of a union must follow to resolve a dispute.
The right to take industrial action is almost entirely based on case law.
Industrial disputes are relatively rare in Germany and generally are quickly concluded.
The unions have developed guidelines for the conduct of industrial disputes which are reflected in the constitution of the German Trade Union Confederation.
These guidelines include the following stages:

•  a resolution by the trade union to start a strike action,
•  a resolution by the trade union to initiate a strike ballot of all its members,
•  a call to union members to take part in the strike ballot,
•  the strike ballot,
• the passing of the actual resolution by the responsible executive body of the union,
• an order by the union instructing members to strike, and
• the actual stoppage of work.

LRC-DE-90.10
What are the regulations on workplace safety and health for employee in Germany?

Evershine RD:
According to Work Protection Act, 1996, SS 3-6.
Employers are responsible for ensuring workplaces are sage and hygienic and are required to provide training to supervisors and employees on accident and disease prevention and on first aid.
Workplace health and safety committees comprised of employer and works council representatives, work doctors and health and safety specialist must be established in any workplace with more than 20 employees and hold meetings at least quarterly.

LRC-DE-100.10
What are the circumstances that an employer can terminate an employee in Germany?

Evershine RD:
According to Protection Against Under Dismissal Act, 2008, SS 1-4; German Civil Code, 2002, SS 134, 138, 242, 613a, 622, 626.
Under the Civil Code, the employment relationship can be terminated for good cause by either party without observing a notice period.
In Germany, an employer’s freedom to dismiss an employee is severely restricted by the Act on Protection Against Unfair Dismissal.
The employer cannot terminate an employee unless at least one of three statutorily defined reasons for termination exists: personal, conduct-related, or business-related grounds.
Personal grounds for dismissal include physical or mental impairments and extensive absenteeism due to illness and reduced working capacity.
Conduct-related grounds for dismissal include willfully or severely negligent breach of contract, working for a competitor, organizing a wildcat strike, and inexcusable absenteeism.
A dismissal is also socially justified if it is due to changes in the employer’s business organization.
Such business-related grounds are difficult to define abstractly. The employer must prove that the employee’s dismissal was necessary for compelling reasons related to its business.

LRC-DE-100.11
What is the notification period for terminating an employee in Germany?
How much is the severance pay?

Evershine RD:
The notice period requirement increases according to the length of service, varying from 2 weeks’ notice during the 6-month probation period,

The works council must be informed at least 1 week ahead of any notice of termination.
After such notice issued without prior consultation with the works council will be null and void.
Employees have no statutory right to severance pay and are only entitled to severance payments under a collective bargaining agreement or social plan with the works council.
In most cases, severance is usually between 0.5 and 1.5 times the employee’s monthly remuneration per year of service.
In the event of dismissal for business-related reasons, the Act on Protection Against Unfair Dismissal gives the employee the right to compensation if the employee does not bring an action in a labor court that the dismissal is unjustified.
In this case, the employee is entitled to severance pay equal to half the employee’s monthly salary for each year of service.

LRC-DE-100.12
What is the reporting requirement for employer in Germany to notify the termination of employees to the competent authority?

Evershine RD:
There must be a works council hearing.
The dismissal notice must be in written form (a notice of termination given orally is null and viod).
The notice must be signed by the competent person to terminate.
The notice must be delivered to the recipient.

LRC-DE-100.20
What are the regulations on mass layoffs in Germany?

Evershine RD:
According to Protection Against Unfair Dismissal Act, 2008, S17.
For reasons relating to job market policy and to protect the individual employee, the Act on Protection Against Unfair Dismissal imposes an obligation to inform the Federal Employment Agency about mass dismissals in companies with more than 20 employees.
Mass layoffs are deemed to occur if within 30 calendar days the following numbers of employees are given notice of termination:

The legal consequence of notification of the Federal Employment Agency is that, starting with the date of notification, a blocking period of one month begins during which a dismissal is not valid.
After expiration of the blocking period, the reported dismissals must be executed within 90 days.
If the employer fails to submit notification of the mass layoff, all dismissals based on the layoff will be nonvalid.

LRC-DE-100.30
What is the time limit for employer in Germany to pay employees upon termination?

Evershine RD:
It is common for employers and employees to settle termination claims that have been filed with the labor court in return for payment of negotiated severance.

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The Engaging Manager from Headquarter
Ms. Anna Wang, Speak German, English and Chinese.
skype: burlinna

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