Information on German law

What are the legal requirements?

Germany is Europe's largest labour market. It offers flexible employment models. Social security contributions in Germany are paid in roughly equal parts by employers and employees.

The success of a company depends largely on its employees. Germany offers a very well-trained labour force. There are various ways of recruiting staff in Germany. In some cases, even public funds for hiring employees can reduce the operating costs of starting a new business.

Legal protection is a cornerstone for any business.

But what considerations need to be clarified once employees have been found? How is employment regulated? What rules apply to wages, working hours and holiday entitlement? What do employers need to know about the German social security system? How can an employment contract be terminated? And what role do works councils play in Germany?

Contact us and get answers to questions about the law in Germany.

Labour law

There are a large number of labour law regulations in Germany, e.g. the Continued Remuneration Act, the Federal Leave Act, the Act on Notice Periods for the Dismissal of Employees, the Protection against Dismissal Act, the Working Hours Act, the Maternity Protection Act and the Youth Employment Protection Act. The employment contract can be concluded informally unless laws or collective agreements require an exception.

An employment contract in which the conditions of the employer-employee relationship are set out is usually drawn up in writing. Collective agreements between employers' organisations and trade unions only apply to employers and employees who are members of an employers' organisation or a trade union. An exception applies to agreements that have been declared generally binding by the Federal Ministry of Labour and Social Affairs. An overview of generally applicable collective agreements can be found on the website of the German Customs Office. Some labour law regulations do not allow any deviations in the employment contract and/or collective agreement. Below we provide a brief overview of the German minimum wage regulations, working time and holiday regulations as well as sick leave.

Equal Treatment Act

The General Equal Treatment Act, often also referred to as the Anti-Discrimination Act, implements EU regulations on anti-discrimination. It stipulates a general ban on discrimination against persons on the grounds of ethnic origin, gender, religion or belief, disability, age and sexual orientation.

Wages and salaries

In Germany, wages are generally negotiated individually. However, a general minimum wage applies. The minimum hourly wage was 12.41 euros from January 2024.

Higher minimum wages must be set in certain sectors (e.g. with universally applicable collective agreements). An overview of these industry-specific minimum wages is provided online by German customs.

There are also general exceptions to the national minimum wage. For example, the following group categories are not covered by the minimum wage regulation:

  • Young people under the age of 18
  • Students completing compulsory internships or other internships of up to three months
  • Long-term unemployed (one year or longer) during the first six months of employment

Social security law

Bonuses may only be granted if they have been agreed in the individual employment contracts or in collective agreements.

Working hours

Working hours in Germany are based on the EU Working Time Directive. Employees may work eight hours per day (48 hours per week). Saturday is considered a normal working day. The permitted weekly working time for a five-day week is 40 hours in total. Most business is conducted from Monday to Friday, but retailers and the manufacturing industry generally also work on Saturdays. Sundays, on the other hand, are generally considered days off. An extension of working hours to a maximum of ten hours per day is possible under certain conditions. Managers are excluded from the scope of the Working Hours Act.


Overtime must be compensated by additional time off. An overtime bonus is possible, but is not stipulated by law. Overtime bonuses only have to be paid if this is provided for in individual contracts or in applicable collective agreements.

Work breaks

The statutory amount of work breaks depends on the total number of hours worked per day. For a daily working time of six to nine hours, employees are entitled to a break of 30 minutes. This entitlement increases to 45 minutes if they work more than nine hours a day. Breaks can be spread throughout the day, but must not be shorter than 15 minutes. Statutory breaks of at least eleven hours apply between shifts.

Holidays and public holidays

Full-time employees who work six days a week are entitled to at least 24 paid holiday days (equivalent to four weeks) per year. This means that full-time employees who work five days a week are entitled to at least 20 days per year.

Employees are entitled to a proportionate amount of paid holiday if they work for less than six months in a calendar year. During the typical six-month probationary period at the start of a new employment contract, employees are generally not entitled to holiday days.

The number of public holidays varies from state to state; in some regions of Germany there is a minimum of ten to a maximum of 13 public holidays.

Sick leave

Employees are obliged to inform their employer as early as possible of any illness that necessitates absence from work (usually on the first day of sick leave). The expected duration of this absence must also be reported. If the illness lasts longer than three days, the employee is obliged to have the incapacity for work certified by a family doctor. By way of derogation, the employer may also request a medical certificate confirming the employee's incapacity for work from the first day of illness. The employer can access the certificate online via the employee's statutory health insurance provider.

Employees are entitled to sick pay amounting to 100 per cent of their normal salary until the time of recovery, limited to a maximum of six weeks.

Posted workers

When expanding into Germany, international companies often not only hire new employees in Germany. It may also be necessary to second staff with management or specialised tasks from the parent company abroad to a new German company for a limited period of time. In some cases, these employees are posted to Germany on the basis of their existing foreign employment relationship. In such cases, EU law and German law stipulate the applicability of certain German minimum employment conditions. Detailed information on the regulations to be observed can be found on the websites of the European Commission on employee postings and the German customs office on employers based abroad

The German social security system

In Germany, social security contributions are paid in roughly equal parts by the employer and the employee. The employer retains them and distributes them to the social insurance institutions.

In contrast to some other industrialised countries, basic social security provision in Germany is financed collectively through a redistribution process. Current social security costs (e.g. for pensioners, the sick or those in need of care and the unemployed) are paid directly from contributions by employees and employers.

The social security contributions are made up of

  • Health insurance
  • Long-term care insurance
  • Pension insurance
  • Unemployment insurance
  • Accident insurance

In general, social security contributions are paid in roughly equal parts by the employer and the employee. Only the costs for accident insurance are borne exclusively by the employer. Overall, the employer's share of social security contributions amounts to around 21 per cent of the employee's gross salary. There is a joint fund for all social insurance components. Only the health insurance fund can be chosen individually by the employee. Employees in Germany receive a net wage or net salary from which taxes and social security contributions have already been deducted. The employer withholds the taxes to be paid by the employee and transfers the money directly to the tax office. Accordingly, all employees must be registered with the local tax office. Social security contributions are also withheld by the employer after calculating the gross salary and transferred to the employee's health insurance fund (which then distributes all contributions, with the exception of accident insurance, to all parties involved). The employer must pay the accident insurance contributions separately to the relevant employers' liability insurance association.

People from other countries are generally not exempt from social security contributions, unless they are employed on a non-permanent basis. However, there are numerous intergovernmental social security agreements that come into effect if a person from another country later leaves the Federal Republic of Germany.

We can help you with social security issues or put you in touch with the right people to talk to


Stefan Matz

Division management
+49 (0)40 - 22 70 19 - 14

The Consent Management Platform ( we use could not be loaded. This can happen if AdBlockers incorrectly block this URL. Some features such as maps, proximity search or forms, cannot be used this way. To use these features, please deactivate your AdBlocker or allow access to *