Terms of Employment

The Employment Contract

A contract of employment setting out the terms and conditions of the employeremployee relationship is usually drawn up in writing (verbal agreement is also possible). In principle, the contract can be formulated in any language. However, a binding German version is advisable as German courts require a German translation of any contract drawn up in another language in the event of any legal proceedings being instigated.

There is no legally fixed form for a contract of employment. Nonetheless, it is highly advisable to define certain points, such as:

• A rea of activity and general description of tasks
• Date of contract inception and, in the case of fixed-term contracts, duration of the agreement
• Daily and/or weekly working hours
• Probationary period
• Remuneration
• Holiday allowance
• Declaration of the notice period
• Declaration of confidentiality
• If applicable, a ban on the employee working for a competitor for a two-year period after leaving the company
• Possible secondary occupations
• Annual holidays
• Penalty for breach of contract

Payment

Employee pay can be negotiated freely unless a minimum wage applies. German law does not prescribe a statutory minimum wage for most professions. Minimum wage agreements have only been established in the following industries:

• General construction trade
• Roofing
• Painting and varnishing trade
• Commercial building cleaning trade
• Electrical engineering trade
• Mining specialists
• Commercial laundry services (in customer business premises)
• Waste management
• Nursing care sector

The federal governemnt will establish further minimum wage agreements for the security services industry, money and value transportation services, and the temporary employment sector in 2011.

Adjustable Working Hours

Working hours are very flexible in Germany. Under German labor law (Arbeitsrecht) employees are allowed to work 48 hours per week. Saturday is considered to be a normal working day, whereas Sunday is widely considered a day off. Most business is conducted from Monday to Friday but retailers and manufacturing industries usually operate on Saturdays as well.

A total of 60 hours per week (or ten hours a day over six days) is possible under certain circumstances.

Extra hours worked must be compensated through the allocation of additional time off. An overtime bonus is possible, but not mandatory. Bonuses have to be paid only when required by individual or collective labor agreements.

The statutory amount of work breaks depends on the total number of hours worked per day. Employees are entitled to a break of 30 minutes when working between six and nine working hours per day. Employees are entitled to a 45 minute break where more than nine hours a day are worked. Breaks may be split up throughout the day, but divisions may not be shorter than 15 minutes. Statutory breaks of at least eleven hours exist between shifts.

Vacation and Public Holidays

Full-time employees working 6 days per week are entitled to a minimum of 24 paid vacation days (the equivalent of 4 weeks) per year; accordingly, full-time employees working 5 days per week are entitled to a minimum of 20 days per year.

The employee is entitled to a pro-rated period of paid vacation when working for less than six months within one calendar year. During the typical six-month probationary period at the beginning of any new employment contract, employees are not normally entitled to take any vacation days.

The number of public holidays varies from state to state in Germany.

Number of Public Holidays in Germany Listed by States

Sick Leave

Employees are obliged to inform their employer about any sickness requiring an absence from work and the expected duration of this absence as soon as possible (generally on the first day of the sick leave). Where the period of sick leave exceeds three days, employees are obliged to have a general practitioner provide proof of their incapacity to work. Notwithstanding this, employers may also request medical certification of an employee’s incapacity to work beginning on the first day of sick leave.

Employees are entitled to sick pay amounting to 100 percent of the normal salary until the time of recovery, though limited to a maximum of six weeks.

Maternity Leave

Employees should inform the employer of any pregnancy and the expected delivery date as early as possible.

A maternity protection period starts six weeks before the expected birth date and ends eight weeks after delivery. Pregnant employees are only allowed to work during this time if a doctor certifies that the work will not be harmful to the health of the mother and child. (In cases of premature or multiple births, the employee is not obliged to return to work for a period of up to twelve weeks after delivery - without having to provide proof of medical necessity for this extended absence.)

During the maternity protection period, pregnant employees are entitled to the average sum of their wages for the three months (or 13 weeks) period prior to the pregnancy paid by the employee’s public health insurance (or the state in the case of privately health insured employees) and the employer.

Anti-Discrimination

The General Equal Treatment Act of 2006 (Allgemeines Gleichbehandlungsgesetz, AGG), often referred to as the anti-discrimination act, implements EU regulations on anti-discrimination.

The anti-discrimination act mandates a general prohibition of discrimination against any person for reasons of:

• Race
• Ethnicity
• Gender
• Religion or ideology
• Disability
• Age
• Sexual orientation