Things to Do and Avoid When Hiring in Germany

United States-based global employers with operations in Germany should bear in mind that German labor laws include worker protections and other requirements that don't typically apply to domestic workforces.

"Any employers hiring in Germany should be aware that employment relationships are highly regulated by statutory laws in Germany," said Verena Braeckeler-Kogel, an attorney with Pusch Wahlig Workplace Law in Cologne, Germany.

Detailed Contracts

Employment contracts, for example, are a fundamental step in the hiring process in Germany.

"Employment contracts tend to be very detailed, and employers should use templates that have been reviewed [or] drafted by a German lawyer. Foreign contracts will often include clauses that are not compliant with German law and therefore cannot be enforced," Braeckeler-Kogel said. "Currently, contracts have to be signed by both parties in wet ink. We hope that this will change in 2024."

While companies in the U.S. often provide employees with offer letters that outline salary and other limited information, employers in Germany must put in writing at least 15 employment terms and conditions that companies may not change at will, according to Donald Dowling, an attorney with Littler in New York City.

These include hours, wages, job description, time off, start dates, workplace, probationary period particulars, overtime pay and policies, breaks, vacation, and training, Dowling said. He recommended against providing American-style offer letters in Germany and said it's better to put the essential terms in writing through a contract to protect the employer.

Resumes

One key difference between the end of employment and hiring in Germany and the U.S. is that employees are entitled to detailed reference letters at the end of employment. "These letters will be submitted with an application, and typically one would expect to see a reference letter for every job on the resume," Braeckeler-Kogel said.

Resumes in Germany typically include information on age and children, and candidates usually provide a photo, she said.

Probationary Period

In businesses with more than 10 employees, the workers "will enjoy strong dismissal protection after six months of employment," Braeckeler-Kogel said.

At-will employment, common in the U.S. with certain exceptions, is unusual in Germany and many other countries, Dowling noted.

"Once dismissal protection kicks in, dismissals are only possible for specific reasons, which are reviewed by courts in very much detail. The consequence of an unfair dismissal will be reinstatement unless the case can be settled against severance pay," Braeckeler-Kogel said.

A notice period will have to be observed when terminating an employee, she added. Statutory notice depends on length of service, she explained, noting the minimum is four weeks and the maximum seven months—after 20 years of service.

Employers can dismiss workers on operational grounds, through job eliminations, if there's a compelling business case for doing so, Dowling said. Courts defer to company judgment in such instances but can overturn job eliminations if they disagree, he noted. The employer also must check to see if the company has comparable or lower positions and if so, offer them to laid-off workers, he added.

Caution on Questions

While Germany has no specific statutory regulations on the legitimacy of background checks carried out by a private employer, there is complex case law on the question of what information an employer may legitimately ask an applicant during a job interview, according to Braeckeler-Kogel.

"This can be considered as a benchmark for the legitimacy of background checks, using sources other than the applicant," she said. "In essence, employers may request only such information that has a direct relation to the applicant's future tasks and responsibilities in the particular job in question."

Job interviews are a typical step in the hiring process, but because the applicant is usually in a weaker position, certain questions are prohibited, Braeckeler-Kogel added.

The employer is only entitled to ask for information that is necessary for entering into the employment relationship—for example, qualifications that are required for employment, she said. "Questions concerning pregnancy, age, race [or] ethnic origin, sexual identity, religion, trade union affiliation or severe disability are generally not allowed in a job interview," she noted.

Dinah Wisenberg Brin is a reporter and writer based in Philadelphia.