Adjustments in German employment contracts as of August 2022

The German Verification Act (NachwG) on written terms and conditions of employment has been reformed. From 01.08.2022, employers will be obliged to document significantly more contract terms.

Background on the new requirements for employment contracts under the Verification Act

Not only the Verification Act (NachwG) is affected by the changes in the law, but also the Temporary Employment Act (AÜG) and the Part-Time and Fixed-term Employment Act (TzBfG). The reason for this is the implementation of an EU directive on transparent and predictable working conditions in the European Union. The amending act became effective in July 2022 and is immediately applicable from 1 August 2022.

Information requirements for employers

The new requirements apply to all employees for new hires from 1 August 2022.

For new hires from 1 August 2022, the obligations to provide evidence must always be fulfilled, even without a request from the employee. For employment relationships that already existed before 01.08.2022, evidence must only be submitted if the employee requests the employer to do so; however, this must be done within seven days.

Now, on the first day of work, employers must provide their employee with a transcript containing information on the name and address of the contracting parties, the remuneration and its composition, and the working hours.

The other evidence must be submitted at the latest after seven calendar days. These include in particular:

– End date of the employment relationship in the case of a fixed-term contract.

– Place of work or if an employee “may freely choose his/her place of work”.

– Composition and amount of remuneration including overtime pay, bonuses, allowances, premiums and special payments as well as other components of remuneration, each of which must be stated separately and their due date as well as the method of payment.

– Name and address of the pension provider of the occupational pension scheme, if any.

– Time frame for the performance of work, agreed rest breaks and rest periods and, in the case of agreed shift work, the shift system, the shift rhythm and the conditions for shift changes.

– Length of probationary period and proportionality of probationary period in the case of fixed-term contracts.

Employers must provide for a “fair” probationary period

If a probationary period is agreed for a fixed-term employment relationship, it must be proportionate to the expected duration of the fixed-term and the nature of the work (section 15(3) TzBfG). This means, for example, that a probationary period of six months would be disproportionately long for employees who are employed for a fixed term of eight months.

Important: Additional reference to “the procedure for terminating the employment relationship”.

In addition, as of 1 August 2022, employers will be obliged to inform employees of the procedure to be followed by employees and employers when terminating the employment relationship, at least the requirement that the notice be in writing, the deadlines for terminating the employment relationship and the deadline for bringing an action for unfair dismissal. The latter in particular was usually not written into the contracts and will therefore usually have to be added to the new contracts.

Fines for violations

If the essential terms of the contract referred to in § 2 NachwG are not handed over, not correctly, not completely, not in the prescribed form or not in time, a fine of 2,000 euros per violation may be imposed.

New provisions of the Verification Act also apply to the Part-Time Work and Fixed-Term Employment Act and the Temporary Employment Act

In future, part-time workers who have been employed for more than six months will be able to request a change in working hours, i.e. a change to full-time work. Employers must respond to this request within one month and give reasons for their decision. Another new feature is the so-called “request for a reduction in working time”, which workers can make after more than six months of employment and to which employers must also respond within one month, giving reasons. If they have been employed for more than six months, temporary agency workers should also be able to submit a request to the hirer to take them on. The hirer must respond within one month. In all three cases, employers should prepare their responses with sufficient care so as not to expose themselves to claims derived from them.

Recommendation

If you as an employer use standard contracts, we strongly advise you to review them and adapt them to the requirements of the new Verification Act. In addition, you should prepare an information sheet for existing employment relationships, which you can hand out to employees on request (within 7 days).

We will be happy to advise you on this!