German employment law will introduce new legislation bringing numerous changes in 2024 that HR managers should be aware of.
New legislation enters into force
The factors for calculating the levels in the social insurance system were adjusted on 1 January 2024. You can find the current rates and limits here. The statutory minimum wage was increased to €12.41. The annual earnings limit for mini-jobs (being a form of part-time employment allowing workers to earn a limited income without being subject to the usual full social security contributions) in 2024 has been raised to €6,456 (€538/month).
Since 7 December 2023, employees who are unable to work have been able to have their incapacity for work determined by telephone, similar to the position in the COVID-19 pandemic, provided that there are no severe symptoms and the patient is known to the doctor’s surgery. Sick leave by telephone is to be made permanent, with corresponding guidelines to be drawn up by the Federal Joint Committee by the end of January 2024.
According to the amended Accident Insurance Notification Ordinance (UVAV), notifications of accidents at work and occupational illnesses can now be submitted electronically to employers’ liability insurance associations and accident insurance funds from 1 January 2024. After a transitional period ending on 31 December 2027, digital reporting will then become mandatory for employers.
The German Supply Chain Due Diligence Act (LkSG) will also apply to companies with at least 1,000 employees from 1 January 2024. However, small and medium-sized companies are also indirectly affected, as the law requires large companies to ensure that their direct suppliers also comply with the requirements and address them along the supply chain. The Federal Office of Economics and Export Control (BAFA) has published guidance to support this.
From 1 April 2024, companies affected by accelerated structural change (demographics, digitalisation, decarbonisation) and the catch-up effects of the COVID-19 pandemic can be supported by a “qualification allowance” to retain employees in the company through additional training. According to the “Act to Strengthen the Promotion of Initial and Continuing Vocational Training” (Federal Law Gazette I No. 191 of 20 July 2023), employers can release employees for training, regardless of the size of the company, the employee’s age or qualifications, and receive a training allowance from the Federal Employment Agency during this time. Companies are therefore relieved of the burden of paying wages, but bear the costs of further training. To qualify for the training allowance, a significant proportion of the workforce must be in need of training as a result of structural change and there must be a company agreement or company-level collective agreement to this effect. The training allowance is paid regardless of the size of the company, the age or qualifications of the employees and is paid as compensation for 60% or 67% of the net wage lost as a result of the training.
Outlook
The draft law on legal certainty in works council remuneration (Second Act to Amend the Works Constitution Act, BR-Drs. 564/23) is expected to come into force shortly. It is intended to clarify that the date on which the works council member takes up the position is to be used as the basis for determining which employees are a comparator to the works council member for determing the works council remuneration. If there is an objective reason, the comparative group can be redefined. In addition, the parties to the works council agreement can set out a procedure for determining comparable employees. In order to create more transparency, both the specification of comparability set out in the works agreement and any subsequent mutual agreement in writing between the employer and the works council can only be reviewed for gross errors. In addition, in line with case law, the draft legislation provides that there will be deemed to be no favouritism or discrimination with regard to the remuneration paid, if the works council member fulfils the conditions and criteria necessary to be awarded such remuneration and the determination is not based on an error of judgement.
So far, German lawmakers have been unable to agree on an amendment to the Working Hours Act that would remove the uncertainty surrounding the recording of working time. Employers have criticised the considerable additional work involved, and a draft bill leaked last spring did not provide any clarity. Concrete rules for recording working hours are not expected until the second quarter at the earliest.
As part of its digital strategy, the German government has announced that it will publish an Employee Data Protection Act to provide legal clarity for employers and employees and effectively protect the personal rights of employees. It remains to be seen whether and with what regulations this legislative proposal will be implemented.
The draft of the “Act on the introduction of a right to leave for the partner after the birth of a child and on the amendment of other laws in the area of family-related benefits” of March 2023 has also been postponed. Originally planned for January 2024, this Family Start Time Act was intended to grant partners paid leave of ten working days after the birth of a child without having to take annual leave or parental leave (§ 25a MuSchG-E).
Please do not hesitate to contact us if you would like advice on any of these topics.