Most expat employees in Germany sign their employment contract within days of receiving it, often under time pressure from a relocation timeline. Then, two years later, when something goes wrong, they discover that the contract they signed contained clauses that significantly limit their rights. A 60-minute review before signing typically saves 60 hours of regret afterward. Here are the clauses we always check first.
1. The notice period (Kündigungsfrist)
The statutory notice period for employees is 4 weeks to the 15th or end of the month under § 622(1) BGB. Contractual notice periods can be longer — typical for senior roles. Things to check:
- Is the notice period the same for both sides? Under § 622(6) BGB, the notice period for the employee cannot be longer than the notice period for the employer. Contracts in violation of this rule are partially invalid.
- Long notice periods (3+ months) are common for senior roles but should match your real flexibility needs. A 6-month notice period can severely constrain your job-search timing.
- Watch for hidden „end of quarter” or „end of year” termination dates that effectively double the notice period.
- Probation period (Probezeit): typically 6 months, during which the notice period is 2 weeks (§ 622(3) BGB). Make sure the contract does not extend the probation beyond 6 months.
2. The salary and bonus structure
- Is the base salary clear, including the payment date and the number of monthly payments per year (12 or 13)?
- Are 13th-month or holiday-pay components fixed contractual entitlements or „voluntary”?
- Bonus: is it a fixed claim, a target-based claim, or labelled „discretionary”? See our Bonus article on what „discretionary” really means.
- Are there Freiwilligkeitsvorbehalt or Widerrufsvorbehalt clauses? Combined, these may be invalid under § 307 BGB.
- Long-term incentive (LTI), share/options vesting: are the vesting dates and forfeiture-on-leave terms clear?
- Tax-free allowances (mobility, internet, home-office) — are they documented?
3. Working time and overtime
- Contractual weekly hours — is this realistic for your role, or does it understate the actual expectation?
- Overtime clause: „all overtime included in salary” is typically invalid for salaries below €7,550/month (2026 West threshold). See our Overtime article.
- Specific overtime cap clauses („up to 10 hours/month included”): partially valid, with overtime beyond the cap separately payable.
- Home-office / remote-work rights: is this contractually fixed, or at the employer’s discretion?
- Working-time recording: under recent BAG case-law, the employer must have a recording system. Where it is missing, your overtime claims are easier to prove.
4. Vacation
- Statutory minimum: 20 days for a 5-day week (4 weeks).
- Contractual norm: 25–30 days, depending on sector and seniority.
- Watch for clauses that distinguish statutory and contractual vacation — the contractual portion can validly have shorter lapsing rules.
- Special leave (Sonderurlaub) provisions: wedding, birth of child, death of close relative.
- Pro-rating rules on entry/exit: the second-half-of-year full-entitlement rule (§ 5(1)(c) BUrlG) often saves substantial vacation days at exit.
5. The Ausschlussfrist clause
If the Ausschlussfrist clause is properly drafted and you have a wage claim 4 months later, the claim is barred. Most experienced employment lawyers know this; most employees do not.
6. Non-compete clauses (nachvertragliches Wettbewerbsverbot)
A post-employment non-compete clause is valid in Germany only if it meets strict requirements under §§ 74 ff. HGB:
- Written form, signed by both parties.
- Maximum duration: 2 years.
- Must specify a Karenzentschädigung (compensation) of at least 50% of the last received salary (base + variable), paid for the duration of the non-compete period.
- Must be reasonable in scope (geographic, sectoral, functional).
- Without a valid compensation clause, the non-compete is wholly unenforceable.
Watch for non-compete clauses without the Karenzentschädigung wording — these are unenforceable, but only if you know it. Watch also for hidden non-compete provisions in „intellectual property” or „confidentiality” clauses.
7. Non-solicitation clauses (Abwerbeverbot)
Clauses prohibiting you from soliciting former colleagues or clients after the employment ends are more permissive than non-competes — they do not require Karenzentschädigung. But they must be reasonably limited in scope and duration (typically 1–2 years). Sweeping „you may never contact any current or former employee” clauses are often invalid.
8. Intellectual property and inventions
Standard clauses transfer all inventions and IP created during employment to the employer. Under the Arbeitnehmererfindergesetz (ArbnErfG), employees who make patentable inventions in the course of employment are entitled to a compensation (Vergütung) calculated based on the commercial value of the invention. The contract cannot validly waive this right.
For software developers, designers, and creatives: check what is „in the course of employment” vs. what you create on your own time. Clauses claiming everything you create — including evening side projects — are often overly broad and partially invalid.
9. Confidentiality and post-employment obligations
- Confidentiality clauses: typically reasonable; check whether they survive employment (they typically do).
- Return of company property: standard.
- „Cooperation” obligations after employment (e.g., to assist in litigation): check time and effort caps; should be reasonable.
10. Termination grounds and trigger events
- Does the contract specify any „good cause” or trigger events for termination?
- Are there clauses tying termination to non-employment events (e.g., loss of professional licence, regulatory action)?
- Are there „change of control” provisions giving you or the employer rights on company sale?
11. Jurisdiction and governing law
For an employee working in Germany, German labor law applies as a mandatory matter (Article 8 Rome I Regulation). A contract that purports to apply foreign law to a Germany-based employee cannot validly displace the mandatory provisions of German labor law — but it can complicate dispute resolution. Always check:
- Is German law the governing law?
- Is the competent court the German Arbeitsgericht where you work?
- Is there an arbitration clause? Arbitration of individual employment claims is generally not permitted in Germany (§ 4 ArbGG), so such clauses are typically invalid.
12. Other clauses we always flag
- Right to assign duties to a different location (Versetzungsklausel): common, but the new location must still be reasonable in commute terms.
- Right to change job duties (Tätigkeitsänderungsklausel): common, but cannot reduce the essential nature of the role.
- Right to set working hours (Lage der Arbeitszeit): employer typically reserves this — but extreme reservations (e.g., „at any time of day or night”) may be invalid.
- Vehicle / company car: personal use, taxation, return obligations on leave.
- Pension contributions (bAV, Direktversicherung): details often deferred to side documents.
- Severance pre-agreed (Abfindungsregelung): rare, but worth checking.
- Sign-on bonus with clawback: common in tech and finance; clawback periods of 1–3 years are typical; longer periods may be unenforceable.
- Variable pay tied to events outside your control: check the gating mechanism.
The 60-minute pre-signing review process
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Send us the contract
German or English version (we read both). Plus any side documents (bonus plan, share/option plan, company handbook).
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Within 24-48 hours: written review
A clause-by-clause review identifying: (a) clauses that are likely invalid; (b) clauses that significantly restrict your rights; (c) clauses that are negotiable in your favour.
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30-minute call to discuss
We explain the implications and prioritise the changes to push for. Most contracts have 3–5 high-priority items.
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Drafted counter-proposal
A redlined version of the contract with our proposed wording for the priority items, ready for you to send to HR.
How much negotiating room is there?
It depends on the role and the employer. Typical experience:
- Senior roles, mid-career hires: substantial negotiating room. Bonus structure, notice period, vacation, sign-on, non-compete — all typically negotiable.
- Junior to mid-level at established employers: moderate room. Vacation days, home-office, bonus details often negotiable; base salary harder.
- Junior at large corporates with standardised contracts: minimal room. Standard contract usually applies as-is. Focus on understanding what you are agreeing to rather than changing it.
- Startups: highly variable. Often very flexible on contract terms; less flexible on salary.
The cost-benefit
Our standard pre-signing contract review is typically €450–€750 net. The most common findings:
- Invalid Ausschlussfrist or overtime clauses — preserved claims worth €5,000–€30,000 over a typical employment.
- Unenforceable non-compete clauses — career flexibility worth multiples of the salary.
- Pro-rated bonus protection — worth ~€10,000 at typical mid-year exit.
- Specific overtime cap — savings of 50–100 hours of unpaid overtime per year.
The cost-benefit is typically 10–50x in the employee’s favour. Skipping the review is one of the most common — and most expensive — mistakes expat employees make in their first German role.