30.06.2022 | Employment Law
Changes to German law on employment contracts
New Verification Act (Nachweisgesetz) applies from 1 August 2022
- As a result of the implementation of the European Union (EU) Directives on Transparent and Reliable Working Conditions (EU Directive 2019/1152 - Working Conditions Directive), the German legislator has, among other things, also amended the Verification Act (Nachweisgesetz).
- Numerous detailed working conditions must be documented in the future in addition to the conditions already mentioned in the previous Verification Act.
- The new regulations will come into force quite quickly on 1 August.
- Since violations of the Verification Act can be sanctioned with fines of up to 2,000 euros, employers should adapt standard employment contracts in due time, which, in our opinion, will be necessary for every company.
As of August, the following additional information is required:
- End date of the employment relationship in the case of fixed-term contracts
- If applicable, free choice of place of work by the employee
- If agreed, the duration of the probationary period
- The composition and amount of pay, including overtime pay, bonuses, allowances, premiums and special payments and other components of pay, each of which must be stated separately, and their due dates and the method of payment
- The agreed working hours, agreed rest breaks and rest periods and, in the case of agreed shift work, the shift system, the shift rhythm and the conditions for shift changes
- If agreed, the possibility of ordering overtime and its conditions
- Any entitlement to training provided by the employer.
- If the employer promises the employee a company pension through a pension provider, the name and address of that provider; the obligation to provide evidence does not apply if the pension provider is obliged to provide this information.
- The procedure to be followed by the employer and the employee when terminating the employment relationship, at least the written form requirement and the time limits for terminating the employment relationship, as well as the time limit for bringing an action for unfair dismissal; section 7 of the Dismissal Protection Act also applies if the time limit for bringing an action for unfair dismissal is not properly proven.
Short transition period - Stressful summer for employers
The new obligations apply to new hires as of 1 August.In contrast to the previous regulation, however, the employee must already have the written documentation with the information on the name and address of the contracting parties, the remuneration and its composition as well as the working hours on the first day of employment. The further documentation must be submitted within seven calendar days at the latest.
Employees hired before 1 August need only be informed in writing of their essential terms and conditions of employment if they request the employer to do so. In that case, a seven-day deadline applies. Information on leave, occupational pensions, compulsory training, dismissal procedures and applicable collective agreements must be provided within one month at the latest.
What else is new?
If the essential working conditions in existing employment relationships change, then the employer must have informed the employee at the latest on the day of the change. Changes in the law or in collective agreements or company or service agreements still do not have to be notified in writing.
Violations of the new rules can result in a fine of up to 2,000 euros.
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