Article
3 min read
Author
Jemima Owen-Jones
Published
September 21, 2022
Last Update
June 21, 2024
Table of Contents
What other changes must companies make to the employment contract?
What is the deadline for these essential terms?
What other documents require handwritten signatures?
What happens in case of non-compliance?
Does the new law apply to existing employment contracts?
Does the new law impact other employment documentation?
Does the new law invalidate electronic employment contracts?
Navigate international legal compliance with Deel
There’s a new change in the employment process when you hire an employee in Germany. According to new amendments under German employment law, employers must now request all new hires to sign their employment contract by hand in wet ink before the start of the employment relationship to avoid penalties. An electronic form and signature are no longer sufficient.
The German legislator passed the new regulations under the New Verification Act (Nachweisgesetz - NachwG), which came into effect on August 1, 2022. The new laws hope to provide more transparent employment relationships and predictable working conditions to comply with the EU Directive and ensure safety in the workplace.
The updated legislation requires employers to include additional information in the employment contract. Employers should update their employment contract template to outline the existing requirements and essential working conditions:
The employer must provide the most important conditions to the employee in writing by the first working day. However, German law stipulates different deadlines for different subjects:
Subjects | Deadline |
---|---|
Name and address of the contracting parties, details of wages, and working time. | No later than the first working day. |
Start date, information on the time limit, place of work, description of the activity, and duration of the agreed probationary period. | No later than the 7th calendar day after the start of the employment relationship. |
All other essential working conditions as listed above. | No later than one month after the start of the employment relationship. |
Companies must also provide and obtain handwritten signatures for:
The law allows for a fine of up to 2,000 EUR if an employer fails to provide a correct contract, provides an incomplete document, does not provide a hard copy, or fails to meet the deadlines.
Under the old law in Germany, there were no sanctions in case of violations.
No, but all current employees are entitled to request a hand-signed hard copy of their employment contract containing the additional information and contractual conditions listed above. The employer will then have seven days to amend the standard employment contract and return it to the employee.
In addition, if the essential terms and conditions of employment in the existing employment relationships change, the employer must inform the employee at the latest on the day of the change in wet-ink.
Failing to provide the information in time would also be considered a violation of the new Verification Act. You could receive a fine of up to EUR 2,000 for each case.
The new law does not apply to statutory provisions, collective agreements, works agreements, or service agreements. Independent contractor agreements are also unaffected.
An employment contract in electronic form does not invalidate the employment contract. Employers can continue to effectively conclude employment contracts electronically if they provide an additional hard copy containing the essential terms of the employment relationship signed by hand in wet ink.
Building an international team can be time-consuming, especially when compliance is involved. Germany’s new contract guidelines left many scrambling to keep up. Deel’s local hiring expertise can keep up with it all for you.
If you’re hiring an employee from Germany, Deel can take care of all the regulations for you as your employer of record. We also help you navigate common compliance challenges such as:
With Deel you can hire anyone, anywhere in the world, within minutes. With legally-vetted contracts and global compliance, we'll have your new hires set up to work in no time.
Book a demo with our team today to find out.
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