Employment Contracts in Germany — Legal Advice

NachwG — What the Employer Must Document

Since 1 August 2022, the Nachweisgesetz requires employers to document the essential conditions of employment and make them available to the employee within statutory deadlines. Certain core information must be provided no later than the first day of work, further information no later than the seventh calendar day after the agreed start of employment, and the remaining statutory information no later than one month after the agreed start date.

The required information includes, among other matters: place of work, scope of duties, working hours and overtime rules, remuneration components and payment intervals, holiday entitlement, the procedure to be followed when terminating the employment relationship (including the statutory written-form requirement, applicable notice periods and the three-week period for filing a dismissal-protection claim), probationary period, applicable collective agreements or works agreements, and — for fixed-term contracts — the agreed end date or expected duration.

Since 1 January 2025, the information may in many cases be transmitted electronically in text form, provided the document is accessible to the employee, can be saved and printed, and the employer requests confirmation of receipt. The electronic option does not apply in all sectors; employees can always request a written paper record. A breach of the documentation obligation does not automatically invalidate the agreed employment terms, but may lead to regulatory consequences and affect the evidentiary position in a later dispute.

Standard Contract Terms

A well-drafted employment contract addresses: the scope of duties and location, working time and overtime arrangements, remuneration structure (fixed, variable, bonuses), notice periods under § 622 BGB — including the longer statutory employer notice periods that apply with increasing length of service and any valid contractual alignment of the employee’s notice period — holiday entitlement including the statutory minimum equivalent to 20 working days for an employee working a regular five-day week, employment-reference rights including the statutory right to an Arbeitszeugnis at the end of employment, return of company property, confidentiality, and applicable collective arrangements, contractual exclusion periods, governing-law issues in international cases, and the competent court where this can validly be agreed.

Clauses in standard employment contracts are subject to AGB review under §§ 305 ff. BGB: surprising clauses may not become part of the contract; clauses that unreasonably disadvantage the employee may be void. Many employment contract clauses that look enforceable on paper fail AGB review in practice — in particular, broadly drafted overtime flat-rate clauses, disproportionate contractual penalty clauses, unclear voluntariness or revocability reservations, excessive exclusion periods, and excessive post-contractual restrictions.

Fixed-Term Contracts — Befristung

Fixed-term employment contracts (befristete Arbeitsverträge) are subject to the TzBfG. A fixed-term contract without an objective reason (sachgrundlose Befristung) under § 14(2) TzBfG is permissible for up to two years. Within the general two-year maximum, the contract may ordinarily be extended no more than three times, although applicable collective agreements may provide different limits. As a general rule, a fixed-term contract without an objective reason is not permitted if the employee has previously been employed by the same legal employer. Very narrow exceptions may apply where the previous employment was very long ago, entirely different in nature or of very short duration.

The fixed-term agreement must satisfy the statutory written-form requirement before the employee begins work. This can be done by wet-ink signatures or, in principle, by qualified electronic signatures meeting §§ 126 and 126a BGB. An ordinary email, scanned signature or simple electronic signature is not sufficient. If the statutory form is not completed before work begins, the fixed-term clause is generally ineffective and the employment relationship is treated as having been concluded for an indefinite period under § 16 TzBfG.

A fixed-term contract may be justified by an objective reason under § 14(1) TzBfG, for example a temporary replacement, a demonstrably temporary project-related staffing need, or employment for the purpose of assessing the employee’s suitability. Fixed-term contracts supported by an objective reason are not subject to the general two-year limit. However, repeated successive fixed-term contracts may still be reviewed for institutional abuse, taking into account their total duration, number and circumstances.

Probation Periods

A probationary period within an indefinite employment contract is typically up to six months. During an agreed probationary period of no more than six months, § 622(3) BGB generally permits termination on two weeks’ notice. An individual employment contract cannot ordinarily shorten this statutory period, although a valid collective agreement may provide otherwise.

A contractual probationary period and the statutory waiting period under the KSchG are separate concepts. General dismissal protection under § 1 KSchG generally begins only after the employment relationship has existed for more than six months, provided that the establishment also meets the employee-number threshold under § 23 KSchG. For a fixed-term employment relationship, any probationary period must also be proportionate to the expected duration of the contract and the nature of the work under § 15(3) TzBfG.

Executive Service Contracts — Anstellungsvertrag

Managing directors are generally not treated as ordinary employees under German employment law. Their relationship with the GmbH is based on a service contract (Anstellungsvertrag). The corporate appointment as managing director and the underlying service agreement are legally separate. Removal from office does not automatically terminate the service agreement, and termination of the service agreement does not by itself necessarily end the corporate appointment.

The KSchG does not apply in the same way; the ordinary employment-law requirement of a prior warning before many conduct-based terminations does not apply in the same way; and disputes relating to a managing director service agreement are generally heard by the ordinary civil courts, particularly while the individual holds the corporate office. Jurisdiction may nevertheless depend on the person’s status, the timing of any removal from office and the legal nature of the underlying relationship.

Key provisions in a managing director service contract: remuneration and variable components, scope of duties and reporting obligations, post-contractual non-compete obligations taking into account the principles of §§ 74 ff. HGB and the modifications that may apply to managing directors, D&O insurance, termination and garden leave, notice, and the relationship between the Anstellungsvertrag and the corporate appointment (Bestellung). Further detail is on our managing directors and shareholders page.

Remote Work Arrangements

Remote work (Homeoffice) has no single statutory framework in Germany. The employer may determine the place of work under § 106 GewO only to the extent that the location has not already been fixed by the employment contract, a works agreement, a collective agreement or statutory law. Any instruction must also satisfy the requirement of reasonable discretion. Contractual remote work arrangements address: the agreed work location, equipment provision and data protection, reimbursement of costs, availability obligations, health and safety compliance, and working-time recording.

Whether the employer can require a return to the office depends on the wording of the employment contract, any agreed revocation or flexibility clause, applicable works agreements and the limits of reasonable discretion under § 106 GewO. Where a works council exists, it may have co-determination rights over the design of mobile work arrangements, including under § 87(1) no. 14 BetrVG. This does not in itself require the employer to introduce remote work, but the implementation and practical rules may need to be agreed with the works council.

Post-Contractual Non-Compete Clauses

A post-contractual non-compete clause (nachvertragliches Wettbewerbsverbot) binds the employee only if: it is concluded in writing, it provides compensation of at least 50% of the employee’s most recent contractual remuneration and benefits for the entire duration of the restriction, the duration does not exceed two years, and the restriction is justified by the employer’s legitimate business interests. A clause that contains no promise of compensation is generally void. Insufficient compensation may make the clause non-binding on the employee. Excessive scope may make it non-binding in whole or in part.

Before the employment ends, the employer may waive the non-compete by written declaration. The employee is then released from the competitive restriction. However, under § 75a HGB, the employer is generally released from the compensation obligation only one year after the waiver declaration.

Foreign Employees — Contract and Permit Interface

The employment contract must support the requirements of the intended residence and work authorisation, including the nature of the role, remuneration, working time and, where relevant, the place of work. A change of employer or a material change to the role, salary, working time or other employment conditions may have immigration-law implications, depending on the residence title, the applicable salary threshold and any restrictions recorded in the permit or supplementary sheet.

For EU Blue Card holders, the agreed remuneration must meet the annually adjusted statutory threshold. In 2026, the regular threshold is €50,700 gross per year. A lower threshold of €45,934.20 applies under the statutory conditions to shortage occupations, qualifying recent graduates and certain IT specialists; Federal Employment Agency approval may be required. The thresholds are adjusted annually and should be checked for the relevant application year. Further detail is on our EU Blue Card page and skilled worker visa page.

Advice by Alexander Kagan, Attorney at Law, admitted to the Hanseatic Bar Association Hamburg. As of: June 2026.

The contents of this page are for general information only and do not constitute legal advice. A mandate is established only upon express acceptance.