Employment Law for Employers in Germany

Employment Contracts — NachwG Compliance

The Nachweisgesetz (NachwG), substantially amended in August 2022, requires employers to document the essential conditions of employment and make them available to the employee. Since 1 January 2025, the essential employment conditions can in many cases be documented in text form and transmitted electronically, provided the document is accessible to the employee, can be saved and printed, and the employer requests confirmation of receipt. The text-form option does not apply in certain sectors covered by § 2a Schwarzarbeitsbekämpfungsgesetz; employees can also request a written paper record, which must then be provided without undue delay.

The NachwG provides different statutory deadlines. Certain core information must be provided no later than the first working day; further information within seven calendar days; and the remaining statutory information within one month after the agreed start of employment. The required information includes, among other matters, place of work, working hours, remuneration components, notice period, applicable collective agreements, and probationary period. Changes to essential employment conditions must generally be communicated no later than the date on which they take effect, subject to the statutory exceptions.

A failure to comply does not invalidate the employment relationship, but it can lead to administrative fines, evidentiary disadvantages and, depending on the circumstances, possible claims for damages. For employment relationships that began before 1 August 2022, the employer must provide the updated statutory information upon the employee’s request within the applicable statutory deadlines.

We draft and review employment contracts and template frameworks — for individual hires, management staff and series use in growing companies. Fixed-term clauses, post-contractual non-compete provisions and termination agreements remain subject to separate statutory form requirements. Further detail is on our employment contracts page.

Day-to-Day Employment Law

The employer’s right to determine the content, place and time of work is subject to the employment contract, collective rules, works agreements, statutory limits and the requirement of reasonable discretion under § 106 GewO. Changes to remuneration, working time or core duties may require employee agreement, a contractual reservation, a works agreement or, in some cases, a formal Änderungskündigung.

Day-to-day employment questions also include: the treatment of probationary periods; the handling of sick leave and continued remuneration under § 3 EFZG; working time limits under the ArbZG and documentation obligations; and the preparation of employer references (Zeugnisse). We advise on the recurring legal questions of the employment relationship and assist with documentation and correspondence where needed.

Warning Letters — Abmahnung

A relevant prior warning is generally required before an ordinary conduct-based termination unless the breach is so serious that a warning is legally dispensable. For the Abmahnung to fulfil its notice and warning function, it must identify the specific conduct complained of precisely, make clear that repetition will not be accepted, and warn of the consequence of termination. An imprecise or substantively inadequate warning may fail to fulfil this function and weaken the employer’s position in later dismissal proceedings.

We draft warning letters for employers and advise on whether the conduct in question satisfies the threshold for a formal warning and whether the conduct, if repeated, may provide a legally relevant basis for further employment-law measures. Further detail is on our warning letter page.

Termination Protection — KSchG

Where the KSchG applies — which requires that the employee has completed the six-month statutory waiting period and the establishment regularly employs more than ten employees, calculated under the weighting rules of § 23 KSchG — a dismissal must be socially justified under § 1 KSchG: conduct-related, person-related, or operational.

Operational dismissals (betriebsbedingte Kündigungen) require a sustainable operational decision leading to the elimination of the position, no suitable alternative employment opportunity, and — where the KSchG applies — proper social selection among comparable employees under § 1(3) KSchG (considering length of service, age, maintenance obligations, and severe disability). The six-month waiting period under the KSchG is distinct from any contractually agreed probationary period. Even where general KSchG protection does not apply, dismissals remain subject to notice periods, special protection rules, anti-discrimination law, good-faith limits and works council consultation where applicable.

An employee who wishes to challenge a written dismissal must generally file a dismissal protection claim within three weeks after receipt under § 4 KSchG. A dismissal without sufficient grounds risks dismissal protection proceedings, continued-employment exposure and litigation costs. Risk assessment before issuing the notice is essential. We advise on dismissal risk and strategy before the notice is issued. Further detail is on our termination protection page.

Termination Agreements — Aufhebungsvertrag

A termination agreement (Aufhebungsvertrag) ends the employment relationship by mutual consent and requires written form under § 623 BGB; electronic form is excluded. The prohibition on unfair negotiation conduct (Gebot des fairen Verhandelns, BAG judgment of 7 February 2019, 6 AZR 75/18) applies: if the duty of fair negotiation is breached, the employee may be entitled to be placed in the position as if the termination agreement had not been concluded. As a risk-management measure, the employee may be given a reasonable opportunity to consider the offer; the decisive legal test, however, is whether the employer created or exploited an unfair negotiation situation that materially impaired the employee’s freedom of decision. The fact that an offer is made for immediate acceptance does not, by itself, establish a breach of that duty.

A termination agreement can trigger a Sperrzeit under § 159 SGB III, regularly up to twelve weeks, unless the employment agency recognises an important reason. Employers should avoid giving binding assurances about unemployment-benefit consequences. Key provisions to address: severance amount, effective date, garden leave, reference (Zeugnis), return of company property, non-disparagement, and post-contractual non-compete where applicable. Further detail is on our termination agreement page.

Severance Pay

There is no general statutory right to severance pay following every dismissal. Severance may arise under a termination agreement or court settlement, a social plan, collective or contractual rules, § 1a KSchG in qualifying operational-dismissal cases, or a court dissolution judgment under §§ 9 and 10 KSchG. A frequently used negotiation reference is 0.5 gross monthly salaries per year of service; the same factor appears in § 1a KSchG, but outside that statutory route the amount remains a matter of negotiation and case-specific risk assessment. Further detail is on our severance pay page.

§ 45c AufenthG — New Information Obligation Since 2026

§ 45c AufenthG applies where an employer established in Germany concludes an employment contract for work in Germany with a third-country national whose residence or habitual residence is abroad at the time of contracting. On the first day of work at the latest, the employer must inform the employee in text form of the advisory services available under § 45b AufenthG and provide the contact details of the nearest advisory centre. The employer is required to provide the statutory information and contact details; it is not required to provide the advisory service itself. The duty does not apply in cases of cross-border placement within the meaning of § 299 SGB III.

This obligation applies specifically to the described category of hiring from abroad — not to all foreign employees already working in Germany. Separately, employers must verify before employment begins whether the residence title permits the specific work and must retain the required documentation for the duration of employment. Where employment linked to an employment residence title ends earlier than planned, notification duties toward the immigration authority may arise. § 45c creates a statutory compliance obligation that should be integrated into recruiting and onboarding processes and documented internally.

Works Council Interaction

Where a works council (Betriebsrat) exists, different participation rights apply depending on the measure. Hiring, grading, regrading and transfers may require prior information and consent under § 99 BetrVG in establishments with more than twenty employees entitled to vote. Working-time arrangements and collective remuneration principles may be subject to co-determination under § 87 BetrVG; the works council’s co-determination generally concerns remuneration principles and structures, not every individual salary decision. Every dismissal requires prior consultation under § 102 BetrVG — a dismissal issued without prior works council consultation is invalid. The employer must provide the works council with the information necessary to assess the intended dismissal, including the employee’s personal data, type and date of termination, notice period and dismissal reasons.

How We Advise

We advise employers at every stage of the employment relationship — from contract drafting through day-to-day HR law questions to dismissal strategy, termination agreements, and post-termination disputes. Our mandate is typically employer-side; we do not advise employer and employee in the same matter. Where the employment question involves foreign workforce, we coordinate with our business immigration practice. We advise in German and English.

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.