Despite heavy criticism the German parliament has passed a bill on 23 June 2022 that amongst others changes the Verification Act (Nachweisgesetz) (“New Bill”) with effect of 1 August 2022.
Employment Contracts on/after 1 August 2022
The New Bill requires employers for employees who start on/after 1 August 2022 to:
- record more essential terms and conditions of the employment contract of employees;
- sign the record wet ink; and
- hand it over to the employee essentially on the first working day of the employment.
Employment Contracts issued prior to 1 August 2022
For employment relationships existing prior to 1 August 2022 employees can request that the record is provided at the latest on the seventh day after this request. Hence, employers should be prepared to react to such a request.
Other changes & penalties associated with Germany’s New HR Bill
The New Bill also applies for amendments of essential terms and conditions.
Violations of these requirements are subject to administrative fines of up to €2,000. Electronic signatures will no longer be acceptable.
Employers can either:
- draw up an employment agreement that already contains all information required by the Verification Act and handover a wet ink signed version to the employee
- prepare a separate document that contains the required information in addition to the employment contract.
What does the change in legislation mean for you?
- For any new starters from 1 August 2022 you will need to arrange for a hard copy of the contract to be signed and the original sent to the employee to be received either prior to, or on, their first date of employment.
- For the purchase of any new German employment contracts, they will need to incorporate the updated terms and conditions. Ours will.
- If you have previously purchased a contract template from us, we will be happy to review and incorporate the changes to terms and conditions for a reduced fee.
- Should any of your current employees request an updated record, we can either prepare a new employment agreement OR draft a separate document that contains the required information in addition to the employment contract.
Please don’t hesitate to reach out should you have any additional questions.