Employment in Germany is considered indefinite unless otherwise specified in the employment contract or agreed to by both parties in writing. Either party can terminate indefinite-term contracts with proper notice.
Written contracts are not mandatory for establishing an indefinite employment relationship in Germany, and contracts can be entered into orally or in writing. However, a document outlining the work conditions must be written, signed, and given to the employee no later than 1 month after the agreed-upon start date. Employers may provide the work conditions to employees electronically so long as the document is accessible to the employee, can be saved and printed by the employee, and is transmitted individually to each employee.
The written transcript must contain at least the following:
Name and address of the employer and employee
Start date and, if it is a fixed-term contract, the end date or duration
Location(s) where work will take place
Job type and brief job description
Duration of the trial period, if agreed upon
Salary, incentives, overtime pay, surcharges, allowances, premiums, special payments, and other components of remuneration, each indicated separately, and the maturity thereof, and the nature of the payment
Agreed working hours, rest periods, shift work system, shift work rhythm, and prerequisites for shift changes
Entitlement to training provided by the employer, if agreed upon
The possibility of overtime and its conditions, if agreed upon
The duration of the annual holiday
The company pension scheme, and the name and address of the pensioner, if agreed upon
Procedure for termination, including at least the written form requirement, the deadlines for the termination, and the period for filing an action for protection against dismissal
Reference to collective bargaining agreements and other agreements, if applicable
Employers and employees may include a non-competition clause in the contract to restrict the employee's professional activity for up to 2 years after the employment relationship ends by agreement. While employers can enter into non-solicitation agreements with other employers to prevent them from hiring their employees, such agreements are not enforceable in court. Non-compete clauses are valid if they are in writing, protect a legitimate business interest, and the employer compensates at least 50% of the last contractual remuneration during the restricted period.
According to Germany's reformed Temporary Employment Act, temporary employees can be engaged through an agency for a maximum term of 18 months. Afterward, the employer engages them as regular employees, or the employment agency withdraws them from the assignment. However, the term can be extended further if there is a 3-month or more gap between 2 assignments.
Temporary employment agencies that provide temporary employees to employers require permits to operate. Hiring employees and allowing them to work as temporary workers is only permitted if there is an employment relationship between the agency and the temporary worker. The agency must ensure that the temporary workers are provided with working conditions and wages similar to those of permanent employees.
The probationary period in Germany lasts up to a maximum of 6 months. During the probationary period, the employment relationship can be terminated by either party with 2 weeks' notice. The probationary period can be stipulated for both indefinite-term and fixed-term contracts. Probationary periods in fixed-term contracts must be proportionate to the length of the contract.
The Hours of Work Act regulates the working hours, which states that a regular, full-time workday may not exceed 8 hours. There is a 10-hour limit, including overtime, as long as an 8-hour average is maintained over 6 calendar months. Employees must have an uninterrupted rest period of at least eleven hours after the end of daily working hours. Young people under 18 cannot be employed more than 8 hours a day and not more than 40 hours a week. They must have a daily rest of at least 12 hours.
These limits can be extended in emergencies when work cannot be postponed, in extraordinary circumstances, or if agreed upon in collective agreements.
Employees in Germany are entitled to a minimum of 24 working days of leave per year. This number is based on a 6-day workweek and can further be amended by collective agreements or employment contracts. Leave is granted continuously but can be divided for operational or personal reasons, such that at least one of the leave allotments lasts 12 consecutive days. Annual leave can be transferred to the following year for personal or business reasons but must be taken before March 31 of that following year. Home workers are also entitled to the same benefits unless otherwise stated in their contracts. While annual leave should be taken the same year that it has accrued, the statute of limitations for unclaimed vacation leave is 3 years.
Employees are entitled to one-twelfth of the annual leave for each full month of employment and acquire full leave entitlement after six months of work. The right to annual leave does not exist if a previous employer has granted the employee the same type of leave in a calendar year. If the vacation can no longer be granted in whole or in part due to the termination of the employment relationship, the employee must be compensated.
In Germany, sick pay leave is regulated under the Continued Remuneration Act (Entgeltfortzahlungsgesetz). The Act requires employers to provide employees with 6 weeks of paid sick leave for each illness that results in an incapacity to work. Employees must inform their employer in due course if they are incapable of working and how long such incapacity may presumably last. If the work incapacity lasts longer than 3 calendar days, an employer must request electronically the employee’s certificate of incapacity from the health insurance company.
During sick leave, the employee is entitled to full remuneration paid by the employer for the first 6 weeks. Following 6 weeks of sick leave compensated by the employer, employees will receive a sickness allowance of 70% of their last gross earnings through their health insurance, which may not exceed 90% of the net earnings. The maximum time for this coverage is 78 weeks within a period of 3 years for the same illness. The employee is entitled to paid sick leave after 4 weeks of continuous employment.
According to the German Maternity Protection Act, female employees are entitled to 14 weeks of paid maternity leave: 6 weeks of prenatal and 8 weeks of postnatal leave. The postnatal leave may be extended to 12 weeks if the female worker gives birth to a child with a disability, or in the case of premature birth or multiple births. Employers cannot terminate the employment contract of a female employee during her pregnancy.
Effective June 1, 2025, maternity regulations apply to female employees who suffer miscarriages from the 13th week of pregnancy.
Female workers, even if unemployed, are entitled to paid maternity leave for the 6 weeks of prenatal leave, the day of the delivery, and the 8 weeks of postnatal leave (12 in case of multiple or premature births). The paid maternity leave is calculated at a rate of 100% of the average regular net wages over the last three months before the prenatal maternity leave period. This benefit – up to EUR 13 (euros) per day – is paid by the mother’s health insurance and the employer, who covers the difference between the money provided by the health insurance and the mother’s previous earnings.
The employer pays the benefits directly to the mother, who can then apply for reimbursement from the relevant health insurance institution. Benefits for mothers with an income below EUR 390 per month are paid by the mother's health insurance alone and match their prior income.
The labor law does not offer a specific provision on paid paternity leave other than the regulations for parental leave.
There is no entitlement to paid paternity leave; however, employees are entitled to parental leave for their natural or adopted child and can request up to 3 years of leave to take care of a newborn until the child turns 3. Both parents can claim this leave at the same time or separately. Up to 12 months of parental leave can be postponed with the employer's permission until the child reaches 8.
The state pays 67% of the employee's average monthly income during parental leave (up to a maximum of 1,800), for up to 12 months. The minimum benefit amount is EUR 300.
Notice for an employer seeking to terminate an employment relationship ranges from 4 weeks for employees with less than 2 years of service to 7 months for employees with more than 20 years of service. Notice must be given in writing. Termination without notice can only be given if there is good cause.
An employee may terminate the employment relationship with a notice period of 4 weeks to the fifteenth or the end of a calendar month. In case of termination during the probationary period, the notice period is 2 weeks. Collective bargaining agreements can provide for shorter notice periods.
In Germany, employees are entitled to severance pay under the following circumstances:
Operational termination – if employees are dismissed due to operational issues, they are entitled to severance pay equal to 50% of their monthly salary for each year of employment.
Termination of employment by the judgment of a court – if a court determines that dismissal was unfair and the employee cannot continue the employment relationship, the court may decide to dissolve the employment contract and order the payment of severance (up to 12 months earnings).
Immoral or extraordinary dismissal – if the court decides that the dismissal is unfair or without reason, it can order the employer to pay an appropriate severance payment if the employee cannot continue the employment relationship.
Severance benefits may vary for employees covered under a works council social plan or collective agreement.
