Changes to German employment law in 2020

Recent changes to German employment law will require employers to respond to ensure that their compliance is compatible with the new legislation.

Higher minimum wage and increase minimum wage for apprenticeship

Since 1 January 2020, the statutory minimum wage has increased to EUR 9.35 gross. Employers must therefore bear in mind that mini-jobbers (typically part-time employees with low wages) may only work for about 48 hours per month to avoid exceeding 450 EUR limit. In addition, a minimum apprenticeship wage in the first year of training of EUR 515 per month has been introduced for all apprenticeships that began on or after 1 January 2020. This is set to be increased gradually in the coming years until it reaches EUR 620 in 2023.

Furthermore, remuneration will also increase in the second (+18% compared to the first year of training), third (+35% compared to the first year of training) and fourth year of apprenticeship (+40% compared to the first year of training). It is worth noting that this minimum wage for apprenticeship does not apply if a collective agreement applies to the apprenticeship.

Certificate of secondment

If inland employees are sent to other European countries or to the EFTA states (Iceland, Liechtenstein, Norway and Switzerland) the employer must apply for a so-called A1 certificate. This serves as proof that the employee is subject to social security contributions in his or her country of residence. The employee must carry the A1 certificate with him/her during every stay for professional reasons, regardless of the duration of the visit. Otherwise, fines of up to EUR 10,000 may be imposed.

Since 1 January 2019, all employers have been obliged to apply for the certificate electronically. Changes to this electronic procedure came into force at the beginning of the year. For example, the exact period of the visit must be specified when applying. All in all, further adjustments to the application procedure for the A1 certificate are to be expected in order to simplify and accelerate it.

Immigration of specialists for employment

One of the most important changes in Germany for 2020 is the Specialist Immigration Act (Fachkräfteeinwanderungsgesetz). It will come into effect on 1 March 2020 and makes the immigration of qualified specialists from non-EU states (so-called third countries) much easier. The Specialist Immigration Act is likely to be of particular interest to the health, handicraft, care and technology sectors. There is a high demand for personnel in these sectors, while the number of applicants is low.

For the first time, the Act introduces a unified terminology for specialists, which includes university graduates and persons with qualified apprenticeship training. However, the law does not limit the concept to so-called 'bottleneck professions' or 'professions where there is a shortage', so that immigration for employment should be possible for all professions. This requires in each case that a respective qualification can be proven.

In order to limit the immigration of low-skilled or unqualified personnel, a so-called acknowledgement procedure is carried out before the specialist receives a working permit, in which the equivalence of the qualification is verified. The Act removes the 'priority checks' that exist at present which demand that the German unemployment agency checks whether a German or EU worker is available for a job before the working permit can be granted to a non-EU worker.

Implications of Brexit on the employment of British citizens in Germany

We have now entered a transitional phase of at least eleven months, during which relations between the EU and UK will continue unchanged and EU law will continue to apply. German companies and British employees in Germany therefore have no reason to fear a change in their residence status, at least this year.

To do

Check that your organisation is complying with the requirement that posted workers have an A1 certificate, and consider whether the new immigration rules make Germany a more attractive place to recruit and build presence.