Germany’s legal system is known for being quite stringent. Companies that choose to expand there must adhere to labor requirements swiftly and correctly or face the consequences. Key updates to the Verification Act in Germany go into effect beginning August 1, 2022. These new changes to the Verification Act include new conditions of employment, deadlines for implementation, and penalties for failure to comply.
Staying compliant with employment contract regulations is essential for any company; this becomes even more paramount when operating in a foreign country. Failing to comply with employment laws can bring a company expensive fines and penalties.
In this article, we highlight all the details of this update so that you can remain legally secure in every way.
What Are the Changes to the Verification Act from 2022?
The German Verification Act (Nachweisgeset) of 1995 establishes the contractual conditions an employer must provide to an employee. As of August 1, 2022, the act now provides more transparency, improves working conditions, and creates a standardized employment process.
The new requirements mean that employers must clearly state the following in employment contracts:
- The duration of probation periods
- All conditions and compensation amounts for overtime
- The duration of working hours and rest breaks or rest periods
- The work location and any conditions wherein the employee can request a change of work location
- A clear schedule for shift work, including possible shift changes and how to apply for them
- Any entitlement to training provided by the employer
- Any collective bargaining agreements or service agreements that may apply
- The entire process of dismissal, including notice periods, the written forms, and the deadline for an employee to appeal a dismissal
- If the company provides a pension plan, the name and address of the pension provider.
Employers must also physically detail all of the above in writing. They must then provide this to the employee on the first day of work.
Electronic signatures and contracts are no longer valid. They can be used in tandem with the printed agreement but cannot replace it.
What Happens if You Don’t Apply the Changes?
Previously the Verification Act did not specify penalties for non-compliance.
The new updates include sanctions that penalize those who do not comply.
Failure to implement the Verification Act is an administrative offense.
Employers who fail to implement these changes can face fines of up to 2,000 euros.
What Happens to Existing Employee Contracts?
All current employees can demand a physical copy of their contract. The contract must include the essentials of any and all required changes, such as specified working days and compensation.
In fact, the employer has only seven days once the request is put in to provide it to their employee.
Failure to give employees an updated contract within the deadlines in the section below may result in penalties for the employer.
What Are the Deadlines for Contract Requirements?
There are different deadlines for various aspects of a contract, as follows:
- On the first day of work, both parties have to provide contact information and confirm working hours and wages in writing.
- The contract’s start date, final date (if it is fixed-term), work location, probationary period, and work description must be signed in writing by the seventh calendar day of the contract.
- Finally, all other working conditions and contract details must be signed in written form no later than one month after starting employment.
Outsource Human Resources Necessities Simply with INS Global
Keeping track of payroll and employment contract rules is an ongoing responsibility for any company. Government introduce new regulations and guidelines all the time. Additionally, a global team further complicates the process. That’s why your employees need accurate and precise contracts. When you make mistakes or fail to meet standards, it will not only affect your recruitment results but can also cost the company in fees and fines.
Outsourcing your HR needs to a third-party partner like INS Global reduces unnecessary expenses and time. It streamlines the recruitment and hiring process while guaranteeing that all your contracts and employees are secure.
Finally, INS Global is an experienced provider with over 15 years of experience helping companies expand around the world. We have PEO and EOR services in more than 100 countries, and our team of professional staff uses innovative solutions and strategies to help meet your specific needs.
INS Global helps make your global expansion dreams a reality.