German Labor Laws to Be Mindful of When Recruiting and Employing Talent in Germany

One of the most difficult challenges to overcome when recruiting abroad is being acquainted with the laws, habits, and language of your target country. If you want to hire employees in Germany, you should be familiar with the country's labor practices. Employee safeguards are valued under German labor law, making it an attractive place to work in terms of benefits, holidays, and other perks. Companies, whether domestic and international, must follow these laws while hiring new employees. Ignorance of the law is not a defense, as you are aware.

Let's go over some of the most important labor rules in Germany that you should be aware of while looking for talent abroad.

‍The General Equal Treatment Act is also known as the Allgemeines Gleichbehandlungsgesetz

The General Equal Treatment Act of Germany is an extension of European Union Human Rights protection legislation that prohibits employers from discriminating against employees. As a result, the goal of the General Equal Treatment Act is to prevent and eliminate prejudice. The Act's protection extends to uneven treatment on many grounds, such as

Ethnicity, Race, Age, Sex, Religion, Belief, Sexual Orientation, Disability, Motherhood and Pregnancy.

‍Mutterschutzgesetz - Maternity Protection Act

In Germany, maternity leave must last at least six weeks before the birth (unless the mother expressly says that she is ready to abbreviate it) and at least eight weeks following the birth on full pay. The key point here is that the mother is not allowed to work for 8 weeks after giving birth, whereas there is more leeway in the weeks preceding the birth.

Except under severe circumstances, employers are not permitted to terminate an employee during their pregnancy and for up to 4 months after birth. During this time, the employee, however, is free to leave. Furthermore, parental leave of up to 24 months (taken by one parent) or 28 weeks (if the parents divide it) is available for everyone.

‍Part-Time and Fixed-Term Employment Act - Partzeit- und Befristungsgesetz 

This law creates basic standards and specifies part-time and contract employees in order to protect them from discrimination when compared to full-time employees. Fixed-term contracts are particularly popular among German corporations because the employee is not entitled to severance pay because the contract includes a definitive end date. Furthermore, fixed-term contracts allow a corporation to test out individuals before hiring them permanently.

Under certain conditions, companies must also allow employees to cut their working hours and work part-time permanently. These are some of those conditions:

Employees must have been with the company for at least six months.

More than 15 employees work for the company.

The employee provides written notification of the change for three months.

The employer may refuse to comply only in exceptional situations. Furthermore, organizations with more than 45 employees are required to allow part-time employees to request that their working hours be increased to full-time.

‍Arbeitnehmerüberlassungsgesetz - Employee Leasing Act

In a nutshell, employee leasing is similar to third-party staffing firms and can also include EOR or Employer of Record services in Germany. It enables businesses to hire talent without directly hiring them or making them an official employee. Because the worker is officially employed by the agency and is being leased out to the company for temporary labor, the agency is always liable for tax deductions, social contributions, and so on.

‍Bundesurlaubsgesetz - Federal Act on Vacations

This law specifies how much paid time off (PTO) each sort of employee is entitled to. All German workers are entitled to a minimum of 20 PTO days per year if they work a typical five-day week (Monday-Friday). However, keep in mind that this is the bare minimum of the law. In actuality, firms frequently provide additional vacation days in order to recruit higher-quality employees. Given this, 25-30 PTO days may be considered normal. Employees are only eligible for vacation days when they have been with the company for six months. Businesses must also grant all PTO requests unless there are compelling business grounds to deny them. For example, an employee may not take their yearly vacation, change employment, and then take another annual vacation in the same year.

‍Mindestlohngesetz - Minimum Wage Act

The German minimum wage is 12 Euro per hour, pre-tax, as of October 1, 2022. This is the federal minimum wage, which applies to all German employees. There are exceptions for traineeships, three-month internships, volunteers, vocational training, and more.

‍Working Hours Act - Arbeitszeitgesetz

They say you should work smarter rather than harder. People in Germany, on the other hand, tend to do both, which explains why they have a shorter-than-average work week of 34.2 hours a week. 

The Arbeitszeitgesetz stipulates that the typical workday is eight hours long, with no work permitted on Sundays. Some employees may be permitted to work 10 hours per day with special government approval, albeit the average day may not exceed eight hours over the period of six months.

While many people work Monday through Friday, Germany defines a regular work week as Monday through Saturday. Employees working a six-day work week may not work more than 48 hours each week. There are also legally protected breaks. Workers cannot work for more than six hours without taking a 30-minute or two 15-minute breaks.

‍Kündigungsschutzgesetz - Dismissal Protection Act

In Germany, the circumstances surrounding employee termination are highly rigorous, and termination in general is a significant problem. 

The Kündigungsschutzgesetz protects employees who have worked with the company for more than six months from being fired. Companies can only fire an employee after that point if:

Layoffs result from company reorganization.

They have a long-term ailment.

They engage in stealing, fraud, or other illegal activity.

They are in breach of their contract. 

They are frequently absent without permission. 

‍Xpandium makes hiring abroad simple and legal.

We understand how stringent international laws can be when it comes to attracting top people. As a result, Xpandium manages all legal/compliance and other matters in over 80 countries and territories.

This means that if you're looking for talent in Germany, we'll take care of the details—legal, payroll, HR, benefits, and taxes, so you can focus on other things. Hiring overseas does not have to be stressful, full with legal jargon and translation apps. 

Contact us immediately to learn how you may recruit and employ in Germany!