At a glance: hiring employees in Germany

Background information on applicants

Background checks

Are there any restrictions or prohibitions against background checks on applicants? Does it make a difference if an employer conducts its own checks or hires a third party?

As a rule, background checks are allowed to the extent that an employer is entitled to obtain the relevant information directly from the applicant. This is usually the case if the information sought is objectively and intrinsically linked to the specific position and relevant to the work to be performed. Further restrictions result from data protection laws (eg, checking the background of an applicant by contacting his or her previous employers requires the applicant’s consent). Employers are not entitled to obtain an applicant’s criminal or credit record directly from the relevant registers. Whether they may ask the applicant to obtain and submit such a record is questionable, since these records are standardised and may also contain information that is not relevant to the specific position. Security checks may be conducted if the position is security-sensitive. Psychological, personality and graphological tests require the applicant’s consent, whereas polygraph tests are unlawful. Background checks regarding union membership are not allowed, and checks regarding political or religious affiliation are lawful only if the employer is a political or religious institution. Hiring a third party to conduct background checks is subject to additional data protection restrictions.

Medical examinations

Are there any restrictions or prohibitions against requiring a medical examination as a condition of employment?

An employer may request a medical examination only to the extent that the examination is relevant to the applicant’s physical ability to perform the work and only with the applicant’s consent. The consent requirement, however, is of little help to the applicant, as refusal to consent may cause the employer to reject the application. HIV tests may be required only if the work bears an increased risk of infecting others. Genetic testing of applicants is prohibited.

Drug and alcohol testing

Are there any restrictions or prohibitions against drug and alcohol testing of applicants?

Alcohol and drug tests may be required if an applicant, by drug or alcohol-related misconduct, could endanger him or herself or others or cause substantial property damage. Such tests require the applicant’s consent. Refusal to consent may cause the employer to reject the application.

Hiring of employees

Preference and discrimination

Are there any legal requirements to give preference in hiring to, or not to discriminate against, particular people or groups of people?

An employee working part-time for an indefinite period who has informed the employer in text form that he or she wishes to increase his or her working hours shall be given preference for a vacant position, unless the vacant position does not correspond to the part-time employee’s position, the part-time employee is less qualified than an applicant preferred by the employer or the employee’s wish conflicts with similar wishes of other part-time employees or urgent operational requirements.

Employers with at least 20 employees are required to employ severely disabled persons for at least 5 per cent of the positions in their businesses. However, non-compliance with this obligation does not give a severely disabled person a right to be hired; instead, such a person may be entitled to adequate compensation under non-discrimination law. The General Equal Treatment Act and the prohibition of discrimination concerning an employee’s genetic characteristics also apply in a hiring context.

Must there be a written employment contract? If yes, what essential terms are required to be evidenced in writing?

Statutory law requires only that employment contracts with temporary workers and those parts of employment contracts relating to fixed terms (including mandatory retirement clauses) and post-termination covenants not to compete be in writing. The written form requires the exchange of one or more hard copies with original handwritten (wet) signatures of the employer and the employee on the same hard copy. Regardless, written employment contracts for all employees are a best practice. Written employment contracts are also a way to comply with the Documentation Act, which requires employers to provide to employees written summaries of the essential terms of the employment relationship within one month of its commencement, including, at a minimum, the following:

  • the names and addresses of the parties;
  • the employment commencement date;
  • for fixed-term contracts, the envisaged term of employment;
  • the place of employment or, if an employee will be employed at more than one location, the information that the employee may be required to work at various locations;
  • a brief characterisation or description of the work to be performed;
  • the composition and the amount of remuneration, including all components as well as their due dates;
  • the agreed working hours;
  • the annual vacation;
  • the notice periods; and
  • a general reference to applicable collective bargaining and works agreements.

 

Similar requirements apply to internship contracts. In this case, the summary must be provided immediately following the signing, or, at the latest, before the commencement of the internship.

To what extent are fixed-term employment contracts permissible?

Fixed-term employment contracts are permitted if the limitation in time is justified by reasonable cause. Reasonable cause exists in particular (without limitation) if the operational need for work is only temporary, if an employee replaces another employee (eg, in the case of illness) or if the limitation is for a probationary period. There is no specific maximum duration for such fixed-term contracts; however, the longer the duration, the more difficult it usually is to establish reasonable cause. The successive use of fixed-term employment contracts over many years may amount to an abuse of rights, rendering the limitation unenforceable.

Reasonable cause is not required for fixed-term employment:

  • of new employees and employees whose last employment with the employer ended a very long time ago, was of an entirely different nature or was very short (such contract may be extended up to three times, subject to an overall maximum term of two years);
  • by newly established businesses, unless they are established in connection with a reorganisation of existing businesses, within four years of establishment (such contract may be extended multiple times, subject to an overall maximum term of four years); and
  • of employees who have reached the age of 52 years and have been unemployed for at least four months (such contract may be extended multiple times, subject to an overall maximum term of five years).

 

Specific statutes govern fixed-term employment of scientific and artistic university staff and medical practitioners in further education.

Probationary period

What is the maximum probationary period permitted by law?

The statutory maximum probationary period is six months. Collective bargaining agreements may provide for a shorter or longer maximum period. An extension is only possible if a period shorter than the applicable maximum period has initially been agreed to, only up to the applicable maximum period and only by agreement with the employee. Unless agreed otherwise, during a probationary period of no more than six months, a notice period of two weeks applies.

Agreements with apprentices and other training agreements must provide a probationary period of at least one month but no longer than four months. During the probationary period, a notice of termination with immediate effect may be given.

Classification as contractor or employee

What are the primary factors that distinguish an independent contractor from an employee?

An employee is defined as someone who, based on a contract under private law, is obliged to work according to instructions and heteronomously in someone else’s service and personal dependence. The degree of personal dependence required may vary by the nature of the work to be performed. Contrary to an independent contractor, who is essentially free to determine how to organise his or her work and when and where to work, an employee is integrated into the employer’s operational organisation and subject to the employer’s instructions regarding the contents, performance, time and place of work. In determining whether someone is an employee, all circumstances of the individual case must be taken into account. The wording of the contract is disregarded where its practical implementation shows an employment relationship. Independent contractors who are economically dependent on the employer and, comparable to employees, in need of social protection are regarded as employee-like persons to whom some employment statutes apply.

Temporary agency staffing

Is there any legislation governing temporary staffing through recruitment agencies?

Temporary staffing through recruitment agencies is governed by the Temporary Employment Act. Recruitment agencies are required to have a government permit to operate and are subject to detailed regulation. If a recruitment agency does not have a permit, its employees will automatically become employees of the businesses for which they work, unless they declare within one month from the agreed start date that they wish to stay employed with the recruitment agency. The maximum period that temporary staff may work for the same business is 18 months. In this context, periods during which an individual staffer previously worked for such business are fully taken into account unless they were followed by a break of more than three months. Shorter or longer maximum periods may be set out in a collective bargaining agreement applicable to the business for which the temporary staff work. If the applicable maximum period is exceeded, temporary staff will automatically become employees of the businesses for which they work, unless they declare within one month from exceeding the maximum period that they wish to stay employed with the recruitment agency. A declaration that the temporary staffer wishes to stay with the recruitment agency is only valid if:

  • the temporary staffer submits it in person to the Federal Employment Agency;
  • the Federal Employment Agency adds a note including the date of submission and verification of each employee’s identity; and
  • it is submitted to the recruitment agency or the business within three days of its submission to the Federal Employment Agency.

 

Recruitment agencies must grant a temporary staffer essentially the same terms and conditions of employment, including pay, as the business for which the temporary staffer works grants to comparable employees of its own (the equal treatment rule). Regarding pay, collective bargaining agreements (which apply to most recruitment agencies) may deviate from the equal treatment rule for the initial nine months of staffing (or, subject to certain conditions, for up to 15 months), except for temporary staffers who had been employees of the business (or affiliated entities) during the six-month period immediately preceding temporary staffing. Businesses using temporary staff must allow them access to their collective employee services, such as cafeterias, nurseries and transportation. Temporary staffers must not replace employees on strike.