Germany Employment Legislation Changes 2024
Businesses in Germany will need to be ready to implement these new regulations for their employees in 2024
In this article, we will delve into the 2024 Employment Legislation Changes for Employers in Germany. Let’s understand the key updates and amendments in labor laws that are expected to impact employers across various sectors. Join us as we explore what employers need to know to stay compliant and adapt to the evolving regulatory environment in Germany.
Wages & Contributions
Contribution assessment ceilings:
The income threshold for health and long-term care insurance have now increased to €5,175 per month or €62,100 per year. The nationwide compulsory insurance limit for statutory health insurance has risen to €69,300 annually.
Additionally, the contribution assessment ceilings for pension and unemployment insurance have been adjusted: in West Germany, the ceiling is now €7,550 per month (€90,600 per year), while in East Germany, it is €7,450 per month (€89,400 per year).
Minimum Wage Increment and Mini-Job Threshold Adjustment:
With effect from January 1, 2024, the statutory minimum wage in Germany was increased to €12.41 per hour, with a further increase to €12.82 scheduled for 2025. This affects companies’ financial planning, especially those employing many minimum wage workers.
Additionally, the threshold for low-paid employment, or “mini-jobs” is now linked to the minimum wage and has risen to €538. Mini-jobbers can now work up to 43.35 hours per month. Employment contracts may need adjustments to comply with this change. Furthermore, the minimum training allowance for apprentices in their first year has increased to €649 per month.
Whistleblower Safeguards
Whistleblower Protections and Reporting Channels:
Effective December 2023, the Whistleblower Protection Act mandates that employers with over 50 employees set up reporting channels for whistleblowers. This legislation covers a broad spectrum of violations and safeguards whistleblowers from retaliation if they report in good faith. Companies are required to provide internal reporting mechanisms and manage reports appropriately.
The Act also permits anonymous reporting and establishes deadlines for processing reports and giving feedback to whistleblowers, highlighting the significance of transparency and ethical behavior in the workplace.
It Will Again Be Possible to Obtain a Sick Leave Medical Certificate via Telephone
Obtaining a Sick Leave Medical Certificate Via Telephone:
From December 7, 2023, a permanent provision has been reintroduced for employees to be able to obtain medical certificates for sick leave via telephone under specific conditions. The essential conditions for this are the following:
- The patient must not have severe symptoms.
- The patient must be personally known in the doctor’s practice.
- It is not possible to determine incapacity for work during a video consultation.
General Physicians retain the discretion to assess whether a patient’s incapacity for work can be confirmed via telephone consultation or necessitates an in-person examination. Initially, a medical certificate for up to five days can be issued via telephone, while certificates issued during video consultations are valid for up to seven days. Patients who are new to the GPs practice can receive certificates for a maximum of three days.
Family Welfare Updates
Child Care Leave:
Parents with statutory health insurance are eligible for child sickness benefits for their insured children up to the age of 12. The pandemic temporarily increased the number of eligible days, but this provision expired in 2023. For 2024 and 2025, parents can claim 15 days of child sickness benefits per child, and single parents can claim 30 days per child. Consequently, the total annual entitlement increases to 35 days per parent and 70 days for single parents.
Parental allowance:
For births occurring up to March 31, 2024, the income limit for parental allowance was set at €300,000 for couples and €250,000 for single parents. Starting from April 1, 2024, this limit was lowered to €200,000 of taxable income for both couples and single parents. Further, from April 1, 2025, the income threshold will decrease to €175,000.
Diversity, Equity, and Inclusion updates
Increased Compensatory Levy for Disability Hiring Quotas:
The Compensatory Levy, paid by employers who do not meet the required quotas for hiring severely disabled individuals, has been increased. From January 1, 2024, the maximum monthly rate rose from €360 to €720. This applies to companies with over twenty employees, promoting inclusivity in the workplace and encouraging the hiring of more disabled workers.
Addressing skilled workforce shortages
Skilled Worker Immigration Facilitation:
To address workforce shortages, Germany has eased the process for skilled workers from outside the EU. New regulations, effective since November 2023, include short-term employment opportunities in high-demand sectors and allow skilled workers with at least two years of professional experience and recognized qualifications to work in non-regulated professions.
As of June 1, 2024, Germany has implemented enhanced provisions under the reformed Skilled Labour Immigration Act, facilitating the entry of skilled workers into the country. A key initiative introduced is the Opportunity Card, or ‘Chancenkarte,’ designed to streamline the immigration process for skilled professionals from non-EU nations. This card operates on a points-based system, assessing qualifications, professional experience, ties to Germany, and other relevant criteria.
New Law to Promote Job Training and Further Education:
Effective from April 1, 2024, companies experiencing accelerated structural changes due to demographics, digitalization, decarbonization, or the COVID-19 pandemic recovery can benefit from a “qualification allowance” to retain employees through additional training. Under the “Act to Strengthen the Promotion of Initial and Continuing Vocational Training” (Federal Law Gazette I No. 191 of July 20, 2023), employers can release employees for training and receive a training allowance from the Federal Employment Agency during this period.
This applies regardless of the company size, employee age, or qualifications. Employers are relieved of paying wages during training but are responsible for the training costs. To qualify, a significant portion of the workforce must require training due to structural changes, and there must be a company agreement or company-level collective agreement in place.
The training allowance compensates for 60% or 67% of the net wage lost due to training. From August 1, 2024, eligible young people will receive funding for external vocational training.
Other Updates
Accident Insurance Notification Ordinance:
Effective January 1, 2024, the amended Accident Insurance Notification Ordinance (UVAV) permits electronic submission of workplace accident and occupational illness reports to employers’ liability insurance associations and accident insurance funds. Following a transitional period that concludes on December 31, 2027, digital reporting will become mandatory for all employers.
Integration subsidy for older employees: Extended until the end of 2028, subsidizing remuneration for employees over fifty-five for up to thirty-six months.
Supply Chain Due Diligence Act:
Starting January 1, 2024, the German Supply Chain Due Diligence Act (LkSG) extended its scope to include companies with a minimum of 1,000 employees. This legislation indirectly impacts small and medium-sized enterprises (SMEs), as large companies are mandated to ensure compliance with due diligence requirements throughout their supply chains, including direct suppliers. The Federal Office of Economics and Export Control (BAFA) has issued guidelines to assist with these obligations.
How Beyond Borders HR Can Help You
These 2024 employment legislation changes for Germany can be challenging for employers to process independently. Beyond Borders HR, a global HR consulting firm, stands ready to assist businesses in understanding and implementing these changes effectively. With our extensive expertise in global HR practices, we ensure that your organization stays compliant with the evolving regulatory landscape. Reach out to Beyond Borders HR for tailored solutions, expert guidance, and seamless integration of these legislative updates into your HR policies and practices. Our team is dedicated to empowering your business with the knowledge and support needed to thrive in this dynamic regulatory environment.
