Employer of Record Germany (EOR) solutions from Marzuna make business expansion into Germany easy and hassle-free. Thanks to our cutting-edge HR platform, companies may hire highly competent personnel in Germany without having to create a separate legal organization. It streamlines the recruiting and onboarding of remote workers by handling payroll processing, tax preparation, and other regulatory obligations. Make an immediate appointment for a demonstration to learn more about Marzuna.
Germany boasts a comprehensive framework of labor laws that encompass a wide array of employment aspects, ranging from anti-discrimination provisions and maternity benefits to minimum wage regulations and guidelines governing working hours. Local businesses operating within the country diligently adhere to these regulations, ensuring a fair and just workplace environment.
These labor laws hold equal significance when considering the employment of foreign nationals in Germany. However, it’s worth noting that there are additional regulations specifically tailored to foreigners seeking employment in the country. Importantly, these laws are characterized by their flexibility and non-discriminatory nature, distinguishing them from the regulations in place in many other nations. Foreign nationals enjoy the same rights and entitlements as their German counterparts.
Navigating the intricate landscape of Germany’s labor and employment regulations can be a challenging endeavor. Consequently, collaborating with an Employer of Record (EOR) can prove highly advantageous when expanding your business into Germany. Our team of subject matter experts is here to provide you with the essential guidance necessary to comprehend and comply with German labor regulations. Should you require further assistance, please don’t hesitate to reach out to us.
Some of the provisions of Employment Laws to note before hiring in Germany are as follows:
| Title | Explanation |
|---|---|
| General Equal Treatment Act | Employers are prohibited from discriminating against workers or applicants on the basis of race, ethnicity, sex, gender, religion or philosophical views, handicap, age, or sexual orientation. |
| Part-Time and Limited-Term Employment Act | The law specifies the conditions and legal prerequisites for temporary employee hiring. period. |
| Continuation of Remuneration Act | An employee may request continuing compensation for up to six weeks if they have been employed for at least four weeks and are unable to work for medical reasons that are not their fault. |
| Minimum Wage Act | All workers in Germany are required to be paid a minimum wage of EUR 8.50 per hour by law. |
| Employee Protection and Anti-discrimination Rights | People are protected against discrimination in the workplace on the basis of gender, colour, religion, political opinion, national origin, national extraction, and other criteria by the Australian Human Rights Commission of 1986. Additionally, some of the above listed restrictions are covered under the Fair Work Act of 2009. |
| Protection Against Unfair Dismissal Act | Companies with more than ten workers are required to give a justification for the termination of an employment contract or the firing of an employee. |
| Minimum Vacation Act for Employees | The legislation mandates that employees receive a minimum of 24 working days of vacation or holidays per year. |
| Works Constitution Act | The employer-employee relationship is governed by the German constitution’s act. It enables staff members to take part in social, financial, and personnel matters. |
Timings, Holidays, And Leave Policies In Germany
| Entitlements | Explanation |
|---|---|
| Statutory Working Hours | In Germany, a typical workweek is 48 hours long, with a daily maximum of 10 hours. |
| Rest period | A worker is not allowed to labour continuously for longer than six hours. If an employee works between six and nine hours, a break must last at least 30 minutes; if they work more than nine hours, the break must last 45 minutes. |
| Public Holidays | German employees are entitled to nine public compulsory Public Holidays:
Other public holidays are decided as per the jurisdiction you are a part of. |
| Maternity leave | German law permits a maternity leave of six weeks prior to childbirth and eight weeks following it. |
Germany has put in place a robust legal framework that draws a clear distinction between independent contractors and full-time employees. The determination of an individual’s employment status is based on various methods, including court decisions and assessments conducted by independent entities.
German labor laws are characterized by a remarkable level of protection for employees, encompassing generous provisions. The legal system not only recognizes but also meticulously regulates different employment patterns, spanning limited-duration contracts, part-time positions, and full-time employment, with separate rules governing each category.
When an individual enters into an employment contract with a company, it is of utmost importance to define the nature of the work involved. In the case of full-time employment without a specific time frame, the employer cannot terminate the employee without valid grounds. By default, employment contracts in Germany are presumed to be indefinite in duration. However, if a specific employment period is specified, the contract can be terminated without notice upon its expiration, with the maximum duration for fixed-term contracts set at two years.
To ensure compliance with and protection under the intricacies of German labor laws, it is vital to seek expert guidance. Such guidance can be invaluable in comprehending and adhering to the specific regulations that are pertinent to your unique circumstances.
In the realm of negotiations, Germany offers two primary avenues. Employees have the option to engage in individual negotiations with their employers concerning compensation and benefits, while employee or worker groups can engage in collective bargaining with employers. Often, negotiations occur on a one-on-one basis between the company and prospective employees, particularly in the case of higher-level positions and roles that require the hiring of specific individuals. It’s worth noting that the age of the employee can be a factor influencing negotiations, especially for older employees seeking new positions.
The production industry, which employs a significant portion of the workforce, is where most negotiations between employee or worker groups and companies take place. These groups engage in negotiations covering all aspects of their employment, including pay, benefits, and working hours. Beyond the legally mandated leaves, they also have the option to negotiate additional types of leave.
With the widespread availability of internet access across the globe, the recruitment process has become increasingly similar in most countries. It begins with the company identifying the need to hire new employees and confirming that existing staff cannot fulfil the specific requirements.
Once the need is established, a comprehensive job description is crafted. This document undergoes multiple iterations and revisions before being published on various job portals and platforms. In Germany, LinkedIn serves as a popular avenue for job advertisements, although other platforms such as monster,europa , and even the Federal Employment Agency are also utilised.
Once the application period ends or a sufficient number of applications are received, the HR team initiates the process of screening and shortlisting candidates. Shortlisted applicants then proceed through a series of rounds and interviews to assess their qualifications and knowledge base for the job.
In today’s digital age, a significant portion of the hiring process takes place through online portals, particularly for corporate positions. Online hiring streamlines the candidate search, as potential candidates actively seek out job opportunities. These candidates often possess considerable talent and qualifications.
However, one challenge of online job advertising is the large volume of applications received. Sorting through hundreds of applications can be a daunting task, even with a sizable HR workforce. This is where the expertise of an Employer of Record (EOR) like Marzuna becomes invaluable. Marzuna specialises in the laws and regulations of Germany, making the process of expanding into a new country considerably smoother. We handle essential tasks such as payroll management, employee record keeping, and compliance, allowing you to focus on more significant aspects of your expansion efforts.
In Germany, the issue of probationary periods is not directly addressed by specific laws. This affords employers the flexibility to determine the duration of probation for newly hired candidates. Typically, probationary periods in Germany can span from three months to as long as a year.
German labor laws are designed to safeguard employees against unfair termination by their employers. If an individual has been working for a company for more than six months and the company employs more than ten individuals, the termination of the employment contract must be grounded in valid reasons. Termination can also occur when the contract’s specified duration ends, when notice is provided by either the employee or the employer, or through mutual agreement between both parties.
Employers may decide to terminate an employee for reasons related to the employee’s conduct or due to unavoidable circumstances within the company that necessitate a reduction in the workforce. Redundancy can also be considered a legitimate reason for employment termination.
Understanding the legal requirements and provisions governing employment termination is crucial for both employers and employees in Germany. Seeking legal counsel or expert advice can ensure compliance with labor laws and uphold the rights of all parties involved.
Business expansion is a lengthy process that requires careful planning, especially when going global. Using the EOR method for hiring employees in Germany can speed up the growth process, despite the fact that it is challenging and could take many months to do. Solutions from Employer of Record Germany (EOR) may expedite and simplify your company’s growth in Germany. Our broad network and cutting-edge HR platform ensure that your employees’ job-related responsibilities in Germany—including monthly payroll, work permits, employment contracts, and taxes—are handled in compliance with regional labor laws.
| Visa Category | Explanation | Duration |
|---|---|---|
| Tourist Visa | A tourist visa is required for short-term visits from nationals of countries other than those with whom Germany has visa-free agreements. | Up to three months. |
| Business Visa | Except for citizens of exempt nations, this visa is intended for foreign nationals travelling to Germany on business. | Up to 90 days. |
| Work Visa | The German work visa is intended for those who wish to work in Germany for pay. | As long as your job contract specifies, up to four years |
There are no specific work permits available in Germany that allow foreign nationals to begin or continue working there. The only option for a foreign individual to work in Germany is with a work visa, which you may apply for at the German embassy or consulate closest to you.
Different laws and regulations apply to taxes and payrolls in various nations. These are crucial components of your international expansion and need to be thoroughly explained by legal professionals. Your EOR partner may offer this kind of knowledge. Our business provides EOR solutions to assist you handle payroll and taxation while cutting down on the time it would take you to decide the format of your employment contract.
| Process | Details |
|---|---|
| Tax ID | To complete payroll, all businesses must get the tax account number of each employee. At the federal level, it is through this number that employees’ personal income taxes are identified. |
| Choosing a Payroll System | The selection of a payroll system depends on the availability of healthcare facilities, social security, and other legal requirements. |
| Basic Employee Information | The employee record must contain all information about your personnel. This can help you comply with legal requirements while also streamlining a number of office procedures. |
| Tax | Explanation | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income tax rate | The income tax system in Germany is based on a system of slabs. This implies that rather than taxing the total income, only the difference between one tax level and the next is taxed. income.
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| Financial Year End date | 31st December | ||||||||||||
| Corporate tax | 30% | ||||||||||||
| Social Security rate | 40% | ||||||||||||
| Social Tax | 20% | ||||||||||||
| Sales Tax | State and Central GST ranging from 0% to 28% | ||||||||||||
| Employer Contribution Towards Social Security | 20.33% | ||||||||||||
| Employees’ Contribution Towards Social Security | 19.68% |
Germany has earned a reputation as a business-friendly nation, and establishing a subsidiary in this country can be a straightforward endeavor with the right understanding of local laws and regulations.
The initial step involves securing a registered address or business domicile in Germany, a prerequisite for the registration process. During this phase, you will be tasked with choosing the type of company that suits your business and selecting a unique name for your enterprise.
Following this, you will need to approach the nearest local or regional court to officially register your entity. During the registration process, you will be required to provide specific documents that verify your identity as the owner and establish the legitimacy of your business. Additionally, registering your company with the tax office is a crucial part of the procedure.
The intricate landscape of German company laws can be navigated with ease by availing the expertise of our team, well-versed in this domain. By harnessing our knowledge and experience, you can simplify the process of establishing a subsidiary in Germany, ensuring full compliance with local regulations and facilitating the seamless establishment of your business presence.
