Employ Candidates Compliantly in Germany

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  1. Overview: Germany
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
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Global HR Compliance in Germany

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Germany Guide below will help you understand the nuances of labor legislation in the country.

Companies hire international workforce for various reasons but in most cases they are:

  • entering the foreign markets to sell company products. To do so, the company hires sales representatives who would represent their product and sell it to their local client base.
  • hiring a global talent with unique skills that is unavailable in the local market or costs the company less than the talent with similar skills hired in the home country.

Before entering a certain foreign market or engaging a global talent, it is crucial for the company to understand how it can make local hires and reward its workers on a monthly basis. Growing companies often face a challenge of paying benefits and bonuses to the commission-based independent sales representatives they are working with.

If you intend to hire and pay your foreign workforce in full compliance with labor laws and regulations of Germany, then the Global Employer of Record service from Acumen International may be the best way for you to go. We are an International PEO company and we specialize in global employment, meaning we can employ your employees in Germany and act as their legal employer on your behalf. We will payroll your foreign workforce monthly and provide benefits to them through our global network so you don’t have to set up your own legal entities there.

We are experts in global workforce employment in , and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Germany.

See the guide below for a general overview of labor rules and regulations in Germany or contact us if you need to employ workers in Germany or would like to get more details.

Hiring and Firing Workforce in Germany Guide

Germany being one of the largest economy, a leader in IT market with a remarkable competitive edge among European countries and global market at large is certainly worth attention, especially when it concerns extension of business activities. Notwithstanding these good points, Germany is still considered one of the uneasy places to start off business owing to the long and complicated protocols involved. To lessen this burden, Acumen International has set up a solution that will help any organization -small, medium, large, that wishes to expand to Germany succeed without having to set up their infrastructure in the country. This paper is written to guide you through the fundamental things you must know about operating business in Germany.

Statutory employment rights:

# Contract
Under European legislation national law of any of the parties can be stipulated to the employment contract upon their agreement. However, to protect the employees’ interests, German national law would prevail in all cases when its provisions are more favorable for the employee.

In practice, even when the employer is situated abroad German legislation would be applied for his employment contracts with Germany residents.

As a rule, employment contract are concluded for unlimited period, although it is possible to limit contract period from 2 to 4 years (depending on provisions applied according to the Part-Time and Limited-Term Employment Act).

# Working hours
The statutory working hours in Germany are 8 hours per day, summing up in 48 hours per week. Idle time is usually Sundays and statutory holidays.

However, collective bargaining agreements frequently foresee reduction on working hours to 35-38,5 hours per week and working days from Monday to Friday.

Working hours can be flexible enough, but 11 hours of uninterrupted rest after the working day should be assured by the employer.

# Probation period
Duration of probation period should not exceed 6 months. Both employer and employee can terminate the contract within probation period. Notice of 2 weeks only is required for such termination.

# Annual leave
Minimum 24 calendar days per year are to be provided by the employer on reaching 6-month uninterrupted period of work by the employee. Those 24 days are provided additionally to state holidays and Sundays. Also collective bargaining agreement can foresee up to 6 weeks of vacation.

# Sick leave
Employees are eligible for 6 weeks-leave, during which 100% of their average salary is paid. Depending on the severity of the illness, the employer can decide on whether continue with the employment contract or terminate it. In any case, he is expected to discuss the situation with the employee before making his final decision.

# Overtime
Working overtime in Germany is usually considered normal for employees. In most cases, employers compensate for overtime works by giving commensurate time-offs in lieu of monetary compensation.

# State minimum salary
Statutorily employees cannot be paid less than 8.84 € per hour. This payment is often made around the 25th of every month.

# Employment termination
The notice of termination must be composed in writing with original signature to be valid, all other forms of notice can be waived.

German legislation differentiates ordinary and extraordinary dismissal rules. While extraordinary dismissal comes into effect immediately, ordinary dismissal enters into force with the expiration of a notice period.
The Act of Protection against Unjust Dismissal provides the list of reasons for dismissal with prerequisites to be fulfilled in order to meet requirements of the act.

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