In 2025, new legislation will be introduced into German employment law bringing numerous changes for Human Resources Managers to note.

New legislation coming into force

Social insurance calculation factors

The factors for calculating the levels in the social insurance system were adjusted on 1 January 2025. The current rates and limits can be found here. The statutory minimum wage was increased to € 12.82. The annual earnings limit for “mini-jobs” a form of part-time employment allowing workers to earn a limited income without being subject to the usual full social security contributions) in 2025 has been raised to € 6,672 (€ 556/month). Further information and guidance can be found here.

Employment contracts: Essential contractual terms in electronic form

While it was previously possible to enter into an employment contract electronically, there was a requirement (subject to a fine) to set out the “essential contractual terms” in writing, meaning in the original, with a handwritten signature. Following the revision of Section 2 Verification Act (Nachweisgesetz) by the Fourth Bureaucracy Relief Act (Federal Law Gazette I No. 323 of 29 October 2024), which came into force on 1 January 2025, these terms can now be provided in text form (Section 126b German Civil Code – BGB) and transmitted electronically to the employee, provided that the document is accessible to the employee, can be saved and printed out and the employer requests the employee to provide proof of receipt with the transmission. At the employee’s request, the minutes must be provided in writing without delay, referencing the commencement of the material contractual conditions. This simplification does not apply if the employee works in an economic sector or branch of industry pursuant to Section 2a (1) Undeclared Work Act (Schwarzarbeitsbekämpfungsgesetz). It should be noted that the written form requirement (or qualified electronic signature, Section 126a BGB) is still required for fixed-term employment contracts and post-contractual non-competition agreements.

Employment references

Since 1 January 2025, employment references may be issued electronically using a qualified electronic signature (Section 126a BGB), if the employee agrees. Employers are not obliged to provide a reference in this format. According to the explanatory memorandum to the law, the written form must be used if the qualified electronic signature would allow inadmissible conclusions to be drawn to the detriment of the employee due to the time specified. This would be the case, for example, if the reference is issued retrospectively, particularly in the event of disputes or subsequent corrections to the reference.

Laws and regulations that must be posted

With effect from 1 January 2025, the obligation to post or display the Working Hours Act, the legal ordinances applicable in the company as a result of the Act and the collective agreements or works agreements that contain permissible deviations from the Working Hours Act (Arbeitszeitgesetz – ArbZG) will no longer apply. The obligation to post or display the address of the competent supervisory authority for the protection of young people at work, the official exemptions under the Youth Employment Protection Act (Jugendarbeitsschutzgesetz – JArbSchG) and, if at least three young people are employed, the start and end of working hours and break times (Sections 47, 48 JArbSchG) will also no longer be required. These documents can now be made available to employees using ‘standard company information and communication technology’ (Section 16 (1) ArbZG; Sections 47, 48 JArbSchG), provided that all employees have unhindered access to this information. The written acts provided for in the Youth Employment Protection Act can be in text form, except for certain provisions (Section 6 (4) sentence 1 and Section 21a (2) JArbSchG).

Entry into force of the AI Regulation

The first provisions of Regulation (EU) 2024/1689 on artificial intelligence (AI Regulation) will come into force on 2 February 2025. Under Article 4 AI Regulation, employers are obliged to train employees who are entrusted with the operation and use of AI systems to have a sufficient level of AI competence. In accordance with Section 111 German Trade Ordinance, this training must take place during regular working hours. The cost of this training cannot be charged to the employee.

Application for parental leave

From 1 May 2025, employees will be able to submit their application for parental leave (in accordance with the new Section 16 (1) sentence 1 Parental Allowance and Parental Leave Act (Bundeselterngeld- und Elternzeitgesetz – BBEG) as well as their entitlement to part-time work during parental leave in accordance with Section 15 (7) BEEG (new version) in text form (Section 126b BGB). This means that employers will also be able to reject such an application and its justification in text form, and employers should always request a read receipt or an acknowledgement of receipt in order to be able to prove receipt of the rejection in the event of a dispute.

Outlook

In view of the Bundestag elections on 23 February 2025, it remains to be seen what the new federal government will focus on in terms of personnel and labour market policy. However, the following topics are likely to remain central to the agenda:

Implementation of the EU Pay Transparency Directive

The requirements of the EU Pay Transparency Directive (see article Pay transparency: The EU directive creates a considerable need for implementation | Global law firm | Norton Rose Fulbright) must be transposed into national law by 7 June 2026 at the latest. In order to establish the salary structures required by the directive, companies should already be looking at the requirements today in order to enable implementation that is as legally compliant as possible, regardless of a new national government.

Revision of the Working Hours Act

To date, the German legislator has not been able to agree on an amendment to the Working Hours Act to eliminate the existing uncertainty in the recording of working hours. In view of the structural changes in the world of work and the need to maintain company competitiveness, it remains to be seen which legal regulations will be adopted to provide the necessary flexibility and reduce bureaucratic burdens for employers.

Online voting in works council elections

To make works council elections fit for the future, the draft “Collective Bargaining Act” (Tariftreuegesetz, see BT-Drs. 20/14345), adopted on 27 November 2024, proposes testing online works council elections. Accordingly, electronic voting should be possible for regular works council elections between 1 March and 31 May 2026 in addition to the existing voting system. The law is expected to come into force this year.

Employee Data Act

As part of its digital strategy, the German government presented a draft bill, “Employee Data Act” (Beschäftigtendatengesetz – BeschDG) on 8 October 2024. The aim of the law is to regulate the handling of employee data and protect the personal rights of employees. The draft covers performance reviews, the use of artificial intelligence, the data protection structure of works agreements and bans on using certain evidence. The legislative process is expected to restart in the next legislative period.

Staff measures

In view of the economic challenges expected in 2025, it is assumed that many companies will be assessing the need to reduce their workforce. German law already contains clear rules on the rights of employees and employee representatives in such a scenario. Companies planning large-scale redundancies must negotiate a reconciliation of interests and a social plan with the works council in advance of any action to protect employees from social hardship and mitigate the consequences. From the company’s perspective, the challenge is to conduct these negotiations as efficiently as possible and to conclude them with economically viable results.

Please do not hesitate to contact us if you would like advice on any of these topics.