Reference Guide
German Employment Law — Explained for Expats
Plain-English answers to the questions employees in Germany ask us most often. Every article is written by employment lawyers, cites the relevant statutes (BGB, KSchG, BUrlG and so on), and reflects current case law.
Contracts
Reviewing contract clauses before — and during — employment.
- Non-compete clauses in German employment contracts — what’s enforceable? A post-employment non-compete in Germany only binds you if it is in writing, capped at two years, limited in scope, and pays you at least 50% of your last salary throughout.
- Should you have your German employment contract reviewed before signing? Almost always yes. Clauses on probation, notice, non-competes, bonus, overtime, secrecy, and intellectual property are often negotiable — but only before signing.
Dismissal & Termination
How a dismissal works in Germany, what counts, and how to challenge it.
- Can I be dismissed during the probation period? Yes. During the statutory six-month waiting period and any contractual probation, your employer can dismiss with just two weeks' notice and without giving a substantive reason.
- Dismissal during pregnancy or parental leave Pregnant employees and parents on Elternzeit are protected by special statutes. A dismissal is only possible with prior consent of the responsible regional authority.
- Is a dismissal by email, WhatsApp or text message valid? Under § 623 BGB, a dismissal in Germany must be on paper with a wet-ink signature. An email, WhatsApp, or text message is void — but you must still file within three weeks.
- Operational dismissal (betriebsbedingte Kündigung) — what counts? An operational dismissal is justified only if the role has genuinely been eliminated, no comparable position is available, and the employer has applied the social-selection test correctly.
- What is a Kündigungsschutzklage (wrongful-dismissal claim)? A Kündigungsschutzklage is the formal labor-court action you file to challenge a dismissal in Germany. Here is what it is, when it works, and what the procedure looks like.
- What is the difference between ordinary and extraordinary dismissal? Ordinary dismissals respect the notice period. Extraordinary (summary) dismissals end the employment immediately and are reserved for serious cause under § 626 BGB.
- Why the three-week deadline is the most important number you’ll hear Under § 4 KSchG, you have exactly three weeks from receiving a written dismissal to file your wrongful-dismissal claim. Missing this deadline almost always means the dismissal is treated as valid.
Fees & Costs
Lawyer fees (RVG), court costs, legal-protection insurance, and § 12a ArbGG.
Reference Letters (Zeugnis)
Decoding the German grading system and correcting unfair references.
- Can I ask for an interim reference (Zwischenzeugnis)? Yes, when you have a legitimate reason: a change of manager, an internal application, a long-standing employment relationship, or upcoming negotiations.
- Can I demand corrections to my Zeugnis? Yes. You have a right to a Zeugnis that is truthful and benevolently formulated. Specific errors and downgrades can be challenged at the labor court (Zeugnisberichtigungsklage).
- The hidden grading system in German reference letters German references look like polite letters but contain a coded grading scale from 1 (very good) to 6 (unsatisfactory). Here is how to read yours.
Severance
How severance is calculated, taxed, and negotiated under German law.
- How is severance calculated in Germany? There is no statutory severance formula. In practice, German labor courts use a customary starting point of half a gross monthly salary per year of service — but the real number is driven by case strength and employer leverage.
- How is severance taxed in Germany? Severance is taxed as ordinary income but can benefit from the so-called Fünftelregelung (one-fifth rule), which spreads the rate calculation over five years and can dramatically reduce the effective tax burden.
- Is there a statutory right to severance in Germany? No general right exists. The exceptions: § 1a KSchG, a works-council social plan (Sozialplan), specific contractual or collective-agreement provisions, and court-ordered Auflösung in exceptional cases.
Termination Agreements (Aufhebungsvertrag)
Negotiated exits, severance trade-offs, and the Sperrzeit risk.
- Should I sign the termination agreement my employer offered? Almost never on the spot. An Aufhebungsvertrag waives your dismissal protection, often triggers a 12-week unemployment-benefits blocking period (Sperrzeit), and locks in terms that are usually worse than what we can negotiate.
- Will signing an Aufhebungsvertrag trigger a Sperrzeit on unemployment benefits? Usually yes — 12 weeks of blocked benefits plus a reduction of the total entitlement. The Agentur für Arbeit applies the rule strictly, but there are structural workarounds.
Unemployment & Benefits
Sperrzeit, registering with the Agentur für Arbeit, ALG entitlements.
Vacation & Leave
Statutory vacation, sick leave, parental leave, payout on termination.
- How many vacation days am I entitled to in Germany? The statutory minimum is 20 working days for a 5-day week (24 days for a 6-day week). Most contracts grant 25–30. The full entitlement vests after six months.
- What happens if I get sick during my vacation? Sick days during vacation do not count against your vacation balance — provided you obtain a medical certificate and notify your employer immediately.
- What happens to my unused vacation when I leave the job? Unused vacation that cannot be taken before the end of employment must be paid out in cash (Urlaubsabgeltung) at the average daily gross salary of the last 13 weeks.
Wages & Benefits
Salary, bonus, overtime, expense claims, exclusion periods.
- Bonus dispute: is a ‘discretionary’ bonus really discretionary in Germany? Often, no. German labor courts apply strict standards to discretionary bonuses, requiring exercise according to equitable consideration. A bonus of zero is rarely lawful where targets were met.
- My salary is late — what can I do? Once the payment date has passed, your employer is in default. You can demand payment in writing, claim default interest, and (in extreme cases) refuse to perform further work or terminate without notice.
- Overtime in Germany — when does it have to be paid? It depends on the contract. Catch-all 'all overtime included' clauses are usually invalid. Documenting the hours is the hard part of any overtime claim.
- What is the German exclusion period (Ausschlussfrist) and why does it matter? Most German contracts contain a clause requiring you to assert wage claims in writing within three months — or lose them, regardless of merit. Knowing this clause exists is half the battle.
Warnings (Abmahnung)
Formal warnings, your response rights, and the link to dismissal.
- Can I get an Abmahnung removed from my personnel file? Yes — if the warning is factually wrong, formally defective, or disproportionate. The right derives from your personality right and the employer's duty of care, with no statutory deadline.
- What is an Abmahnung and what should I do if I receive one? An Abmahnung is a formal warning that lays the groundwork for a behavioural dismissal. Not all warnings are valid — and even valid ones can be answered with a counter-statement.
Working Time
Maximum hours, rest periods, weekend work, the Arbeitszeitgesetz.
- Can my employer require me to work weekends? Saturdays — generally yes (subject to weekly hour limits). Sundays — only in narrowly defined exempt sectors. Otherwise Sunday work is prohibited under § 9 ArbZG.
- What are the maximum working hours under German law? The Arbeitszeitgesetz caps daily work at 8 hours (extendable to 10), requires breaks of 30–45 minutes, and prescribes 11 hours of uninterrupted rest between shifts.