German employment contracts (Arbeitsverträge)

Marle Schwien

Updated on Oct 07 • 5 minute read

Your German employment contract is waiting for you in your e-mail inbox? Yay, then all you need to do is sign it and you're all set for your career in Germany!

Take it to step by step though: What elements exactly does a German employment contract have to contain? Simply said, your employment contract in Germany sets out all your rights and obligations as an employer towards your employee - and vice versa. So your German employment contract will contain all the details of your new path: where you will work, for how long, how much and for what money.

We'll outline the details of your contributions as an employee and your employer's compensation in your German employment contract as well as the different types of contracts you might face.

What does a work contract in Germany entail?

Your enthusiasm for your newly landed job in Germany is truly without borders. Fair enough!

However, don’t feel pressured or even dazzled by your bliss to blindly sign your contract of employment. Any employer should give you enough time to review every single component of your German employment contract so that you can be assured that your wishes have been respected and expectations fulfilled.

Having trouble with certain aspects of the German employment contract? Don't hesitate to check with your new employer - or ask a lawyer - for advice if needed.

Take a close look at your German employment contract with this checklist

No later than one month after the agreed start of your employment relationship, the essential contractual conditions must have been laid down in written form - and signed by both parties. In case certain regulations such as holidays or working hours have not been defined, the statutory regulations always apply.

Ready to walk through your employment contract? These are the elements any employment contract in Germany should contain:

  • Job description: A brief outline of the job you will be asked to do will be given here to define the nature of your job.
  • Personal details: The name and address of both contracting parties.
  • Duration of contract: The contract of employment should specify the starting date of your employment and, in the case of a fixed-term contract, its duration.
  • Work conditions: In which location will you work and how often will you have to travel?
  • Probationary period: How long will your probationary period last in the new company? Be aware that during this period your general protection against dismissal will not yet take effect.
  • Protection against unfair dismissal: Speaking of dismissal, what are the notice periods for terminating your employment contract on both sides? Typically, a notice period of four weeks to the fifteenth of the calendar month applies. The notice period is then prolonged, however, based on the overall length of the employment relationship.
  • Work hours: The employer must define your working hours and also your break time. If you work between six and nine hours a day, as an employee you must take at least a 30 minutes break. If you work more than 9 hours, the break must be at least 45 minutes long - although you can also divide it into blocks of at least 15 minutes.
  • Working overtime: The contract must also specify what happens with your hours of overtime. In other words: the working time that exceeds the regular working hours. Employees have the right to be paid for overtime, but you usually only have three years to make your claims for overtime.
  • Salary: During your employment negotiations, you may have already agreed on your salary, which is reflected in your employment contract, including bonuses, allowances, bonuses and special payments, as well as other elements of the salary and their due dates. Don't forget: Germany introduced a minimum wage of at least €9.35 gross per hour as of 2015; therefore, your wage could be above this amount at any time, but never below.
  • Holidays: In addition to the public holidays, you are entitled to at least 20 days' holiday per year if you have a five-day week.
  • Duty to pay compensation: Your employer promises to pay your agreed salary on time - and to continue to pay you your salary during illness. Moreover, the agreement defines that your new employer will correctly calculate and pay income tax and social security contributions.
  • Written payslip: A company with more than 19 employees must regularly provide a written payslip, in which the type and amount of bonuses, deductions, reductions or allowances are noted.
  • Duty of care: To what extent does your employer protect you with its working conditions? Does your employer take into account the maternity protection regulations for pregnant employees or the Youth Employment Protection Act for employees under 18 years of age?
  • Benefits: In Germany, many companies offer their employees benefits such as a company telephone or employee discounts.
  • Pension scheme: Does the company offer you a pension scheme to ensure that you are covered for retirement in the future? Then this should be stated in your employment contract.
  • Clauses: Especially if your new employer operates in a highly competitive market, your employment contract will often contain extensive confidentiality clauses - and these are often backed up by high contractual penalties. For example, your employment contract may contain a non-competition clause that prohibits you from working in the same industry during your employment.

Types of employment contracts in Germany

There are many different forms of employment contracts in Germany: from fixed-term contracts to mini-job contracts or a contract for freelancers or interns.

Generally speaking, a distinction can be made between permanent and fixed-term contracts, with the fixed term then being determined by purpose or time.

Fixed-term employment contract

You might have an employment contract in Germany which is limited in time. Meaning for you: both contracting parties set a time limit on the duration of the employment or the contract is automatically terminated by the occurrence of a certain event without the need for a notice of termination.

For an employment contract to be fixed-term, one of these three conditions must be met:

  • Fixed-term contract: the end of the employment relationship is fixed at the time the contract is concluded.
  • Purpose limitation: when a certain event occurs, the employment relationship is terminated. However, when exactly this event occurs isn't yet known.
  • Terminating condition: The employment contract does not specify whether the event which terminates the employment relationship will actually occur in the future.

To ensure that the employment contract is actually fixed-term, the employment contract needs to be set out in the written form.

So how often can an employer extend a fixed-term employment contract in Germany?

Unfortunately, there’s no universal answer here, as this depends entirely on the reason for the fixed-term contract. Without any objective reason (e.g. parental leave),

a fixed-term contract can be limited to a maximum of two years and can only be extended three times during this period.

Ready to sign your new employment contract in Germany?

There shouldn't be anything between you and your employer any longer! Make sure you take the time to review the items in your employment contract and match them with your expectations. If you find that any aspects of your contract are missing or incorrect, don't hold back and contact the person responsible in the company directly.

Are you happy with the employment contract? Then it's time to sign it and kick off your career in Germany!

Good to know: Although employers do not have to draw up a written contract for an unlimited contract, it's rather unusual not to have one. So feel free to insist on getting a contract in written form.

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