Summer Switch-Up: New Rules for Employment Contracts in Germany

With just under a month to go, German employers are now having to update their employment contracts, or they could face a fine.

It’s not new news that employers must provide employees with certain employment terms in writing, but this summer marks the first time that they could be sanctioned for failing to do so. And in a surprising move for 2022 – the new law requires employment terms to be set out in hard copy and signed with an old-fashioned wet-ink signature.

What’s new?

  • A new law has been passed by the German Parliament to implement an EU directive on transparent and predictable working conditions.
  • The new law requires changes to employment contract templates for all new joiners from 1 August 2022.

What are the changes?

  • Currently, there are certain contractual terms that must be given to employees in writing, such as place of work, working hours and notice periods.
  • The new law has added more essential terms to the list, including the length of the probation period, the composition and amount of remuneration, training entitlement and details around termination procedure.
  • It is unlikely that any existing contracts satisfy the new requirements.
  • Existing employees can also request additional information on their employment terms under the new law, and employers must respond within one week.
  • Unlike the current law, the new law provides for direct sanctions for breaches. If an employer doesn’t provide evidence of the essential terms or does so incorrectly, they risk a fine of up to EUR2,000 per breach.

Is there anything else to be aware of?

  • The new law confirms that employment contracts must be signed in wet ink. E-signatures will not be acceptable.

So, what should employers do now?

  • Get to grips with the new essential terms.
  • Review and update employment contract templates to reflect the changes.
  • Consider how to deal with information requests from existing employees.
  • Keep an eye out for similar updates for other EU member states.

Please get in touch if you have any questions or require any EMEA employment support.


Resource Centre

How can we help you?

How can we help