What statutory regulations exist?
The conditions for doing business in Germany are governed by many different laws. Of particular importance to companies looking to locate in Germany are the regulations concerning employment and national insurance law.
The following provides you with a brief overview of the main laws.
German employment lawsGerman employment laws include numerous related regulations. These include laws on continued remuneration for illness, leave, employee dismissal notice periods, employment protection, working times, maternity protection, juvenile labour protection and industrial tribunals etc.
For the sake of clarity, contracts of employment should be concluded in writing. Within the contract it is possible to stipulate that the laws of a certain country apply. If the contract does not contain such a clause, then it is subject to the law of the state in which the employee regularly works, even if sent on temporary postings elsewhere. If the employee does not usually work in one particular state, the law of the state in which the branch employing that person is located shall apply.
If you require more information on employment laws, we recommend you get in touch with a lawyer. We will be happy to help you find one.
- Source: LHS
National insurance law
The German national insurance system features the following statutory insurances:
1. Pension insurance
2. Unemployment insurance
3. Illness insurance
4. Nursing care insurance
5. Accident insurance
The above insurance systems apply for all employees in Germany whose income is below a legally stipulated amount.
The contributions for insurances 1 to 4 are shared equally between the employer and the employee. The accident insurance contributions are borne solely by the employer. The contribution amounts are based on the employee''s annual income. Insurance contributions for numbers 1 to 4 are deducted from the monthly pay and forwarded by the employer to the National Insurance Agency.
Foreigners are not generally exempt from paying national insurance contributions, unless the work they are doing is temporary. Moreover, numerous intergovernmental national insurance agreements exist which become effective when a foreigner subsequently leaves Germany.
The Business Development department of the state capital Stuttgart will be happy to put you in touch with the people who can answer your national insurance queries.