Jackson & Frank | Workforce Solutions in Germany

Maternity Leave

In Germany, expecting mothers who are employed have the right to avail themselves of up to 14 weeks of paid maternity leave. This includes a mandatory 6-week leave period after childbirth. In the case of multiple births or complications, employees are entitled to take up to 12 additional weeks of paid maternity leave, extending the total to 26 weeks.

Maternity leave in Germany is compensated at 100% of the gross salary, with reimbursement options available through social security. There is no minimum service period requirement, and employers cover the costs of antenatal appointments. Compliance with German labor laws and relevant regulations is crucial in implementing these provisions.

Paternity Leave

In Germany, the partner of an employee who has recently become a parent is entitled to parental leave equivalent to their weekly working hours (5 working days for full-time employment). This leave should be utilized within the initial two weeks following childbirth. Additionally, the employee has the right to take "short absence leave" for the actual birth itself.

The employer covers the expenses of parental leave. In the first six months post-birth, there is an extra leave period of 2 weeks for full-time employees ("additional birth leave"). This particular leave is unpaid by the employer. An employee opting for this additional leave may qualify for state benefits, subject to local regulations.

Ensure compliance with German labor laws and any applicable collective agreements when implementing paternity leave policies.

Parental Leave

In Germany, parents with children under the age of 8 are entitled to parental leave, calculated at 26 times their weekly working hours for each child. The initial 9 weeks are remunerated by the government, covering a percentage of the regular salary up to a specified limit. Following the paid period, an additional 17 weeks of unpaid leave can be negotiated and distributed over the child's first 8 years. This flexible scheduling provides parents with the opportunity to balance work and family responsibilities.

During the first 9 weeks, parents receive financial support from the government, ensuring 70% of their regular salary, capped at 70% of the maximum daily wage. This paid parental leave is applicable until the child reaches one year of age. Employers have the option to apply for an allowance for the paid parental leave through relevant authorities in Germany, emphasizing the importance of adherence to local labor laws and regulations.

Sick Leave

In Germany, employers are mandated to provide sick employees with their salary for a duration of up to 42 days, with the wage payment comprising 100% of the last earned salary during this period. If the illness persists beyond this initial period, social security benefits come into play, covering a percentage of the salary, capped at a specified limit. Typically, employment contracts stipulate that the employer will cover 100% of the employee's full salary for the initial sick leave period, and a percentage during the subsequent period covered by social security. It is important to align with local labor laws and individual employment contracts to ensure compliance with sick leave policies in Germany.

Termination Requirements

In Germany, terminations must adhere to specific regulations and the terms outlined in the employee's contract. The off-boarding process is typically managed by the employer in collaboration with key stakeholders, encompassing any necessary fees and adhering to the prescribed steps for specific termination cases.

Process Management: Employers handle off-boarding with stakeholders and address fees.
Valid Reasons: Termination requires a valid reason and lack of redeployment opportunity.
Grounds for Termination: Recognized reasons include redundancy, long-term disability, underperformance, etc.
Complex Procedures: Unilateral termination without consent or authority approval is generally prohibited.
Preferred Mutual Consent: Seeking mutual agreement is often preferred for compliance and avoids governmental permission.
Employee Communication: Clear and open communication on termination reasons is essential for understanding and transparency.
Data Privacy: Ensuring compliance with data privacy laws when handling and storing employee information during and after termination.

In Germany, an employer can terminate an employment agreement based on valid reasons, such as redundancy or long-term disability, provided there is no suitable redeployment opportunity. Termination is intricate, typically requiring mutual agreement to comply with labor laws and avoid unilateral action without employee consent or approval from authorities, like labor courts.

Notice Period

In Germany, when termination occurs through mutual consent, notice periods are typically required to secure the employee's agreement. The duration of the notice period can range from 1 to 3 months, depending on the employee's length of service. Notice periods generally commence at the end of the month.

Notice periods are determined as follows:

Less than 2 years of service: 1 month's notice
Between 2 and 5 years of service: 2 months' notice
Between 5 and 8 years of service: 3 months' notice
8 years or more of service: 4 months' notice

Severance for Employees

In Germany, when termination occurs by mutual consent, severance payments may be negotiated, typically ranging from 1 to 3 months of salary, depending on the circumstances. If termination is mandated by the court or relevant authorities, statutory severance pay is required, approximately equivalent to 1/2 of the gross monthly salary per year worked.

To mitigate financial risks associated with terminations, our company applies a Severance Accrual to all employment agreements in Germany. This calculation aligns with prevailing statutory entitlements and local best practices. Any unused amounts in the event of employee resignation or absence of severance entitlement are returned to the employer.

Paid Time Off

In Germany, the legal minimum number of vacation days for an employee is determined by the employment period. Generally, employees are entitled to at least 20 days of paid leave per year. However, many employers in Germany often offer their employees 25 to 30 days of paid vacation, and the exact entitlement may vary based on individual employment contracts, collective agreements, or company policies. It's crucial to comply with German labor laws and regulations when determining and providing paid time off.

Public Holidays

Germany observes several national holidays throughout the year.

The key public holidays include:

New Year's Day (Neujahr)(January 1)
Three Kings' Day (Dreikönigstag)(January 6)
Good Friday (Karfreitag)(March 29)
Easter Sunday (Ostern)(March 31)
Easter Monday (Ostermontag)(April 1)
May Day (Tag der Arbeit)(May 1)
Ascension Day (Christi Himmelfahrt)(May 9)
Whit Monday (Pfingstmontag)(May 20)
Corpus Christi (Fronleichnam)(May 30)
Assumption of Mary (Mariä Himmelfahrt)(August 15)
Day of German Unity (Tag der Deutschen Einheit)(October 3)
Reformation Day (Reformationstag)(October 31)
All Saints' Day (Allerheiligen)(November 1)
Repentance Day (Buß- und Bettag)(November 20)
Christmas Day (Weihnachten)(December 25)
St. Stephen's Day (Zweiter Weihnachtsfeiertag)(December 26)

Onboarding

Onboarding typically takes 2 business days after the client signs the Statement of Work (SOW).

Salary Requirements:

At Jackson and Frank, the holiday allowance in Germany is included in the annual salary. This means that the employee's annual salary on the Jackson and Frank platform will comprise both the annual base salary and the holiday allowance.

When calculating the employee's annual salary, it's crucial to consider both the base salary and the holiday allowance.

The holiday allowance, set at 8%, is invoiced monthly as an employer cost, separate from the salary. Compliance with German labor laws and regulations is essential in managing salary structures and benefits.

Employment Contract Details

In Germany, employment contracts are commonly drafted in German or English, and it is not mandatory to have a German version.

An employment contract in Germany should include the following details:

Name
Start date
Duration of the employment
Termination conditions
Job description
Working hours
Probationary period terms (if applicable)
Compensation details
Benefits and allowances
Notice period

Additionally, it is crucial to adhere to German labor laws and regulations when formulating employment contracts. German employment contracts often specify working conditions, benefits, and other essential terms to ensure clarity and compliance with legal requirements.

Probation Period

In Germany, probationary periods are a common practice, and their duration may vary based on the employment agreement. Here are key points regarding probationary periods in Germany:

Duration: Probationary periods in Germany typically range from 1 to 6 months, depending on the nature of the position and the agreement between the employer and the employee.
Extension: Unlike Poland, German law allows for the extension of probationary periods under certain circumstances, provided it is explicitly stated in the employment contract.
Termination: During the probationary period, both the employer and the employee have the right to terminate the employment relationship with shorter notice periods compared to the regular employment period.
Evaluation: Employers often use the probationary period to assess the employee's performance and suitability for the role, and regular feedback is encouraged.

It is crucial to ensure that the terms of the probationary period are clearly outlined in the employment contract and comply with German labor laws and regulations.

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