Does the recently passed “Act on the Further Development of Skilled Worker Migration” (Gesetz zur Weiterentwicklung der Fachkräfteeinwanderung) create new paths in labor migration to Germany?

Germany is suffering a shortage of skilled workers and the demand for qualified staff continues to grow. In order to counteract the shortage of skilled workers, the new draft bill states that priority shall be given to promoting and better exploiting domestic and intra-European potential – according to the recently adopted draft bill. According to statistics, however, this would be far from sufficient to meet the demand for skilled workers.

The resulting gap is to be closed by the immigration of skilled workers from non-European third countries. According to economy expert Monika Schnitzer (German economist and professor for comparative economic research at LMU Munich), 1.5 million immigrants to Germany are required each year in order to even come close to covering the shortage of skilled workers. At the same time, Germany is competing with many other nations at both the European and international level when it comes to the "War for Talents". The USA and Canada continue to lead the way as the "classic" immigration countries. Each of these countries has a very long history of labor migration - especially in the highly skilled sector.

The most crucial prerequisite for successful labor immigration is a functioning immigration law. German Chancellor Olaf Scholz also emphasized the importance of Germany having the most modern skilled labor immigration law in the European Union in order to be perceived as an attractive destination for skilled workers from third countries during a government question time in the German Parliament (German Bundestag) on March 29, 2023. A few months later - on July 7, 2023 - the Act on the Further Development of Skilled Worker Migration (hereafter: the New Skilled Worker Migration Act) was passed. The act is intended to expand the targeted and controlled immigration of skilled workers from third countries and to increase annual immigration by around 60,000 individuals. The following article will shed light on the specific legal changes introduced by the new law and its operational implications, particularly for the HR departments of German-based companies wishing to recruit and employ third-country nationals.

The first Skilled Worker Migration Act came into force in March 2020. At the time, the aim of this act was to counter the shortage of skilled workers by facilitating the immigration of skilled workers from third countries. Many of the regulations established at that time remain unchanged by the new skilled workers migration act. However, the requirements for the application for certain residence permits have been noticeably reduced. Furthermore, some of the existing regulations are being complemented by new residence titles, which - unlike the vast majority of employment-based residence titles - no longer require a binding job offer in Germany.

From now on, German labor migration law will be based on a three-pillar model: the pillar of qualification, the pillar of experience and the pillar of potential.

The pillar of qualification or skilled workers pillar

The skilled workers pillar has always formed the central element of labor migration even before the New Skilled Worker Migration Act was passed. The starting point marks the term “skilled worker”. A skilled worker, as defined by German immigration law, is someone who has obtained a university degree or completed vocational training in Germany or who has obtained a university degree or completed vocational training abroad, provided that the respective degree or program of vocational training is recognized as equivalent to comparable domestic degrees/programs in Germany.

Anyone who qualifies as a skilled worker according to German immigration law will be able to pursue any form of qualified employment in the future. The role does not necessarily have to be related to the acquired qualification anymore. However, one central prerequisite remains that the skilled worker must be able to at least present a binding job offer in Germany when applying for their employment-based residence title for Germany.

Furthermore, the renewal of the German labor migration law is intended to make the EU Blue Card - probably the most familiar and sought-after of all residence titles - accessible to wider range of people. For this purpose, the minimum salary thresholds required for the issuance of an EU Blue Card will be lowered. In addition, the catalog of so-called "shortage occupations" will be significantly expanded. Shortage occupations refer to occupational fields in which the shortage of skilled workers is particularly severe and for which, even under the current legal framework, a lower minimum salary is required in order to apply for an EU Blue Card compared to so-called "standard occupations". In addition to the "typical” shortage occupations such as IT specialists and doctors, the catalog will also include teachers, executive employees in social sector such as childcare, nursing care and health care, as well as other healthcare professions in a broader sense (such as pharmacists, among others). A lower salary threshold now also applies to young professionals - regardless of their occupation - during the first three years of employment. This measure is intended to facilitate the access of highly qualified graduates to the German labor market.

The New Skilled Worker Migration Act will also make the rules on mobility within the EU and on family reunification for dependents of an EU Blue Card holder more flexible. Speaking of flexibility, holders of an EU Blue Card can now change job in Germany much more easily. Under the new legislation, it is sufficient to simply notify the immigration authorities of the change of employer. The authority no longer has to expressly approve the change. Moreover, the obligation to notify the authorities of a change of job now only applies up until one year after the EU Blue Card has been issued (instead of two years).

After all, there will be relatively few changes with regard to the immigration of skilled workers via the "pillar of qualification". However, the EU Blue Card in particular will be made significantly more attractive and accessible for many candidates.

The pillar of experience

The so-called "pillar of experience" is no novelty to German immigration law either. For instance, IT specialists without any university degree or vocational training in particular have already been able to obtain a work permit for Germany if they can show proof of a binding job offer in Germany (whereas the role must provide for a certain minimum salary) and if they have had several years of on-the-job experience in the IT sector.

These candidates will now be eligible for an EU Blue Card on the basis of their professional experience once the New Skilled Worker Migration Act has come into force. However, they must be able to demonstrate that their several years of relevant professional experience in the IT sector are of equal value compared to a degree or vocational training in the same field.

Yet in all other professions besides the IT sector, adequate practical work experience can also enable candidates to obtain a residence title for gainful employment in the future - even without vocational training (or a university degree) that is recognized in Germany:

Anyone who has at least two years of professional experience and who has completed vocational training abroad will be able to directly enter Germany and take up gainful employment – provided that the vocational training program completed is fully recognized as a vocational qualification in the respective country. This means that candidates no longer have to go through an oftentimes lengthy (and unsuccessful) process for recognition of their vocational training in order to prepare their visa application, before they are allowed to enter Germany and commence work. If certain requirements are met, the (partial) lack of vocational qualification can be made up for whilst the foreigner has already relocated to Germany and is pursuing gainful employment. Unlike before, a residence title for re-qualification in Germany (due to the foreign vocational training not being (fully) recognized in Germany) entitles its holder not only to participate in the mere vocational qualification measures (e.g. theory and practical courses, language courses etc), it also allows the holder to take up secondary employment unrelated to their qualification of up to 20 hours per week. Gainful employment in relation to the foreigner’s qualification is even permissible without any further restrictions. Previously, foreigners have often been unable to fund their stay in Germany for re-qualification purposes as their employment opportunities for the duration of the re-qualification measure were simply too limited. In practice, this aspect was often an obstacle preventing applicants from taking advantage of the residence title for re-qualification in Germany. As a result of the New Skilled Worker Migration Act, the financial obstacle to obtaining re-qualification training in Germany has been significantly reduced. However, as a key prerequisite for a residence title for re-qualification foreigners and their potential employers in Germany must commit to applying for recognition of the foreign vocational qualification after the candidate arrived to Germany. In addition, they are obliged to actively promote the recognition process as it proceeds (so-called “recognition partnership”).

The pillar of potential

Probably the most controversially discussed amendment in the New Skilled Worker Migration Act is the so-called “opportunity card” (Chancenkarte). The opportunity card can be obtained by anyone who either meets the requirements for a skilled worker or who qualifies via a newly established points system. The model for this new residence title had most likely been Canadian immigration law. Canada has a long tradition as an immigration country for labor migration. Thereby its immigration system is mainly based on a points system, i.e., potential immigrants can qualify for certain residence titles by earning points. Such concept has been rather uncommon until now, in particular with regard to legal systems in Europe.

The opportunity card is intended to enable foreigners to enter Germany without having an employment contract or a binding job offer yet. Anyone who is considered a skilled worker (i.e. has a foreign university degree recognized in Germany or has at least completed two years of vocational training abroad which is also recognized as vocational qualification in Germany) directly meets the requirements for an opportunity card. Those who have a university degree or vocational qualification that is “only” recognized in the respective country abroad can only qualify for the opportunity card via the points system. Points are awarded in each of the following categories: language skills, professional experience, age and "connection to Germany". Applicants must achieve a minimum of six points in order to successfully apply for an opportunity card. In addition to achieving a certain number of points, candidates must also have at least sufficient German language skills (corresponding to level A2) or, alternatively, English language skills on level B2 or higher. The overemphasis on the requirement "language skills" is certainly a debatable aspect as it ignores the reality for most immigrants. Usually, immigrants only learn the German language on a gradual basis after arriving to Germany. Moreover, knowledge of the German language is often not even required in plenty of occupational fields. Against this background, it is to be welcomed that, instead, at least knowledge of the English language shall also suffice for an opportunity card.

The opportunity card will be issued for a duration of up to one year. During this time, it allows its holder to do trial work for a maximum duration of two weeks (per potential job) or to take up secondary employment for a maximum of 20 hours per week. The opportunity card is therefore only intended to enable the foreigner to look for a job in Germany and to establish a first contact with the local labor market. From the perspective of German employers, this offers the advantage that potential new hires will already be located in Germany and do not have to be recruited from abroad first.

But what happens after a successful job hunt in Germany? How can one ensure a seamless transition to subsequent employment in the context of German immigration law? These questions are at the root of the most significant issue of labor migration to Germany which in turn leads to the central point of criticism of the New Skilled Worker Migration Act:

Even though the New Skilled Worker Migration Act offers a number of valuable solutions for removing (redundant) legal barriers to obtaining a residence permit, the lack of a modern and functional administrative procedure is probably the main reason as to why labor migration to Germany is not functioning properly. German immigration authorities are chronically understaffed. As a result, inquiries and incoming applications regarding the issuance of a residence permit sometimes remain unanswered for months. Even though it is now possible to submit applications online at most of the immigration authorities in the larger cities, the rest of the administrative work processes are lagging far behind in terms of digitization. If the New Skilled Worker Migration Act should indeed result in 60,000 additional applications each year, it is likely to get even worse. The situation at some authorities is currently at such a dramatic high point that they are even shutting down certain e-mail addresses in order to be able to cope with the vast amount of applications and follow-up requests – whereas coping means simply ignoring all incoming messages. Therefore, there is urgent need to create new posts at the immigration offices and to de-bureaucratize and streamline the application procedure for residence permits as far as possible.

Until then, companies should heed the following tips:

Overall, it is advisable to accompany the candidate closely through the residence procedure, especially if there are language barriers to overcome. After all, it is not a matter of course that the clerks at the immigration authorities speak English. If the residence title requires the pre-approval by the Federal Employment Agency (Bundesagentur für Arbeit), one should proactively apply for this prior to the appointment at the German foreign representation or the local immigration authority in order to avoid further delays. Candidates who are allowed to enter Germany without a visa due to their nationality should be encouraged to nevertheless apply for a visa at the German foreign representation in their home country. In principle, these individuals would also be permitted to submit their application for a residence permit to the local immigration authority in Germany after they arrived. However, in view of the fact that unforeseeable delays in the processing of applications are very likely to occur and considering that the foreigner may not work in Germany until their residence permit is issued, it is generally not advisable to make use of the right of visa-free entry. Even if applicants take the route via the German foreign representation in their home country, they should still set aside a sufficient amount of time for the application process.