While Germany ranks as the 114th easiest country in which to open a new business, its complex employment laws can lead to hefty fines and non-compliance. The nation’s strict worker protections — including how to recruit and hire, what benefits to offer, and how to stay compliant — can also be challenging to navigate if you’re not well-versed in national regulations.
Recruiting in Germany
Before you worry about cutting through the bureaucratic red tape of hiring in Germany, you’ll need to recruit a talented team of employees. Understanding the typical workplace culture in Germany will make the recruiting process much smoother for everyone involved. Here are some tips to keep in mind.
1. Avoid Getting Too Personal
In Germany, people have a tendency to keep business professional. You may be tempted to ask personal questions as a way to get to know the candidate, but many German workers will find such questions off-putting. Be polite, but don’t get overly personal.
2. Use Direct Communication
German people tend to be straightforward, so you should be as direct as possible in your communication throughout the recruitment process. Resist the temptation to make unnecessary small talk. Don’t expect candidates to read between the lines, and don’t write off a good candidate just because they seem a bit blunt, as this characteristic is to be expected in the country.
3. Be Punctual
Timeliness is a critical part of workplace culture in Germany, and showing up late is seriously frowned upon. If you’re running a bit late for a meeting with a candidate, let them know right away. You should also take care to keep your meeting within the scheduled time frame, as the candidate will most likely have other commitments to keep when the meeting is over.
4. Get Used to German Workplace Manners
In Germany, colleagues tend to be formal when speaking to one another. You should avoid addressing people by their first names unless they explicitly tell you otherwise. If your job candidate has a title, such as “Doktor,” you should address them by this title along with their last name.
What Is the Recruitment Process Like in Germany?
Bear in mind that while learning about social expectations is an essential part of hiring and doing business in Germany, staffing and recruiting are also legal processes. It’s important to make sure your business stays compliant as you recruit talent overseas.
Legal Requirements for Staffing in Germany
Under the General Act on Equal Treatment, known in Germany as Allgemeines Gleichbehandlungsgesetz (AGG), German employers are expressly forbidden to discriminate against job applicants on the basis of:
- Race or ethnic origin
- Sexual orientation
- Religion or beliefs
As the employer, your company will be subject to the AGG from the time you begin the process of recruiting in Germany. Under this law, an action as simple as posting a job advertisement seeking an employee to join a “young, dynamic team” could be interpreted as age-based discrimination. To avoid misunderstandings, exclude descriptors in your job posting unless they are explicit requirements for the job.
During the recruitment process, avoid asking questions that would force candidates to disclose their status in any of the categories protected under the AGG. Applicants don’t have to answer any questions they find inappropriate, such as inquiries regarding:
- Pregnancy and family planning
- Political affiliation
- Religious faith
- Sexual orientation
- Membership in trade unions
To err on the side of caution, you should avoid asking these types of questions. However, you can ask about applicants’ criminal records and former salaries.
What Legal Checks Can You Make on Employees?
Your company can and should make sure that any candidates you plan to hire are legally allowed to work in Germany. Because Germany is a member of the European Union (EU), citizens of most member states will be able to work there without issue. However, don’t be afraid to verify eligibility. As the employer, you may face legal consequences if you hire employees who lack the visas or permits they need to work in Germany.
How to Hire Employees in Germany
It is best to negotiate clear terms in an employment contract as you begin the hiring process. You are legally required to draft an employment contract that is locally compliant and states information about compensation, benefits, and termination requirements.
During the interview, only ask questions of legitimate interest, and do not invade your candidate’s right to privacy. Many German companies ask for references that include a candidate’s previous work history, job description, years of employment, and more.
Many previous employers follow a rough code to “grade” past employees. The word “average” on a candidate’s references typically means that the person was a non-satisfactory employee, while “good” indicates an average employee and “great” is used to designate a good or outstanding employee.
Germany Employment Compliance
When hiring employees in Germany, it’s essential to stay up-to-date on all employment laws. Your employees cannot work more than eight hours a day. Working time can be extended to a maximum of ten hours if the average daily working time does not exceed eight hours over a period of six months. Typical work weeks average between 35-40 hours. Work on Sundays and public holidays is banned, though exceptions do exist.
The minimum wage in Germany in 2020 is 9.35 euros an hour. The minimum wage is expected to increase to 9.50 euros an hour in 2021 and 10.45 euros an hour by July 2022.
As part of Germany’s employment compliance, employees can join a union, work council, or collective labor agreement if they want to. Through these organizations, workers can discuss working decisions, times, and wages.
Germany’s Civil Code, Industrial Code, and other collective agreements also regulate payment and wages. Employees and third parties must be paid through Germany’s File Transfer and Access Management (FTAM) protocol. An employer must approve a given payroll so that the bank can release payments to employees while the business withholds other contributions such as health insurance payments.
Hiring and Onboarding Germany Employees
Before hiring employees in Germany, you’ll need to establish a subsidiary in the country. It can take six weeks to process your companies’ registration information, and the entire process might take months before you are officially incorporated. During this time, some employers lose valuable talent who cannot afford to wait for a job.
Whenever you onboard a new employee, make sure you have every piece of paperwork necessary to set up payroll and meet all Germany employment compliance policies. It is also helpful to send employees an outline of the onboarding process. Review policies such as the company’s code of conduct, break times, and dress code.
Can I Outsource Hiring & HR?
On April 1, 2017, Germany instituted new licensing requirements that make it difficult to start a subsidiary or choose a company to hire people to work on your behalf. You can no longer employ any Germany hiring outsourcing company. Instead, you’ll need a global PEO that has an AUG or temporary agency license.
Globalization Partners is the first global PEO to be fully compliant in Germany. Contact us today to learn more about our services and how we can help you with Germany employment compliance.