How can employers support employee volunteering? Are employers allowed to preferentially hire Ukrainian refugees?
Amid catastrophes and wars throughout the world, Germany is showing great solidarity in taking in and supporting Ukrainian refugees. Many employers value and wish to promote their employees' voluntary commitment. This article offers a guide to the key legal issues arising in this context.
Employers can grant employees time off to volunteer with/for refugees
Particularly in connection with current events in Ukraine, many Germans are getting involved to help refugees, for example by offering German tutoring or collecting donations. However, because volunteers often lack the time to work with or for refugees, employers are asking themselves how they can give their employees the time to do so.
No general entitlement to time off for voluntary work
While employees do have a general right to paid or unpaid time off from work for voluntary work, this is subject to restrictions.
Section 616 German Civil Code (BGB) provides for a claim to continued payment of remuneration despite absence from work if an employee is prevented from performing work for limited periods for personal reasons beyond their control. However, volunteering does not constitute a personal impediment to performance within the meaning of section 616 German Civil Code (BGB) because the employer's interest in fulfillment of the duty to work takes priority.
The only exception is if the time off is for the benefit of a public honorary office, which means performing a public duty on an voluntary basis. Examples of this are activities for the benefit of the fire department or the German Federal Agency for Technical Relief (THW) or for honorary local political office; these exceptions are set out in special legislation. However, as the voluntary support of refugees does not qualify as such a public honorary office, there is no entitlement to paid time off under section 616 German Civil Code (BGB).
Individually negotiated time off
Of course, employer and employee are free to deviate from these principles in their contractual relationship at any time by individually negotiating different provisions. Therefore, it is always possible to agree on (un)paid time off work, i.e., to waive the employee's entitlement to work.
However, in the case of unpaid time off work, the effects on social security must be considered. If the unpaid time off lasts longer than one month, paid employment ends, meaning the employee must be deregistered from social security and later re-registered. Therefore, this phase should not last longer than four weeks. In addition to the effects on social security, it should be noted that according to current case law, no vacation entitlement arises during unpaid time off work (German Federal Labor Court (BAG), judgment of 19 March 2019 – 9 AZR 315/17).
Time off through donation of overtime and vacation days
Alternatively, employees also have the option of using (or passing on) their overtime and vacation days to volunteer. However, there is no legal provision that specifically allows employees to waive and subsequently transfer vacation days to colleagues.
The first prerequisite for time off work is a corresponding company provision that determines the exact procedure. In particular, the provision should specify how donated time credits that have not been fully utilized are to be handled. It should also clearly define who are eligible recipients of donated time and on what conditions. Donating employees should also be required to put in writing the nature (leave or overtime) and amount of the hours, as well as any waiver of rights in this regard.
If the employer does decide to introduce such a donation system, care should also be taken to ensure that employees donating their time comply with the applicable maximum working hours under section 3 German Working Hours Act (ArbZG) and do not waive the statutory minimum leave under section 13 German Federal Leave Act (BUrlG).
Special considerations for employees who are THW/fire department volunteers
Incidentally, as already mentioned, whether employees are given time off work to fulfil voluntary commitments depends on whether such commitments are deemed to be in the public interest. This is deemed to be the case especially for members of the volunteer fire department and the German Federal Agency for Technical Relief (THW) (though also for local political office).
Volunteer firefighters' entitlement to time off work on full pay is governed by the provisions of the fire and disaster control laws of each German state. For North Rhine-Westphalia, this follows from section 20 (2) sentence 3 of the Fire Safety, General Aid and Disaster Prevention Act (BHKG). This provides for members of the volunteer fire department to be released by their employers on full pay for operations, exercises and training events during working hours. In return, private-sector employers have a cost reimbursement claim against the municipality (section 21 (1) Fire Safety, General Aid and Disaster Prevention Act (BHKG)).
The German Federal Agency for Technical Relief Act (THWG) sets out the material provisions concerning members of the Federal Agency for Technical Relief (THW). Like the members of the volunteer fire department, members of the Federal Agency for Technical Relief (THW) are also released from work on full pay for the duration of their services (section 3 (1) sentence 3 German Federal Agency for Technical Relief Act (THWG)).
Private-sector employers are entitled to be reimbursed by the responsible THW office for wages they continue to pay if more than two working hours per day (or seven hours over a two-week period) are lost (section 3 (2) German Federal Agency for Technical Relief Act (THWG)).
Employer can provide support in the form of monetary or in-kind donations
In addition to giving employees time off work, employers can help promote social commitment by donating money or goods to charitable causes. For example, one option could be to allow the use of vehicles from the company car pool.
In principle, these expenses must also be taken into account for tax purposes, but the German tax authorities often grant tax relief in the form of "catastrophe decrees" issued in response to natural disasters and emergencies. These are letters from the German Federal Ministry of Finance (BMF) or state-level administrative directives that establish a raft of tax relief measures. A similar special decree was also published for "Tax measures to support those affected by the war in Ukraine". For example, the provision of goods and personnel free of charge for humanitarian purposes is exempt from taxation as a gratuitous surrender of value.
In addition, the Confederation of German Employers' Associations (BDA), the German Industry Association (BDI), the Association of German Chambers of Industry and Commerce (DIHK) and the German Confederation of Skilled Crafts (ZDH) have launched the website wirtschafthilft.info, which bundles all relevant information and publishes tips on need-based donations.
Wage donations by employers also an option
Finally, employers can also arrange for so-called donations of wages and salaries, which are exempt from wage tax. In this case, employees make an informal declaration to the employer that they will forego payment of parts of their wages or parts of an accumulated credit balance so that the employer can donate them for the benefit of those affected. If employers pay a percentage of salary into a donation account of an eligible institution within the meaning of Section 10b (1) sentence 2 German Income Tax Act (EStG) and document this, then that percentage of salary is not taxable. The relevant provision with regard to the war in Ukraine can be found in the Federal Ministry of Finance (BMF) letter of March 17, 2022.
While donations of wages are exempt from payroll tax, they are not also exempt from social security contributions. Such donations of wages therefore do not automatically reduce the amount of pay that is subject to contributions; they are therefore irrelevant under social security tax law. Section 1 (1) sentence 1 no. 11 German Social Security Remuneration Ordinance (SvEV) provides for an exemption applicable to gifts and benefits for the benefit of those affected by domestic natural disasters. However, as aid for people in Ukraine does not meet the above conditions, and pending a new legislative provision to the contrary, donations of wages for the benefit of people in Ukraine remain irrelevant under social security tax law.
Employers should avoid giving priority to filling vacancies with Ukrainian refugees without justification, or advertising jobs only on job portals for Ukrainian refugees
Ukrainian refugees with a residence permit – which they receive automatically under section 24 German Residence Act (AufenthG) – generally have unrestricted access to the German labor market. While section 4a (2) German Residence Act (AufenthG) does require them to obtain permission from the immigration authority to take up gainful employment, the German Federal Ministry of the Interior has strongly recommended that the German states include permission to take up employment in the residence title from the outset.
However, employers who do prioritize Ukrainian refugees or advertise positions on job portals only for Ukrainian refugees may fall foul of the prohibition of discrimination under the German General Equal Treatment Act (AGG) and thus be liable for damages under its section 15 (1) sentence 1. Under section 7 (1) German General Equal Treatment Act (AGG), employees must not be discriminated against on the grounds of race or ethnic origin. The same applies to job advertisements under section 11 German General Equal Treatment Act (AGG). If Ukrainian refugees are given preferential treatment in the application process on the basis of their status as Ukrainian refugees, this constitutes an (indirect) disadvantage to the other applicants on the basis of race or ethnic origin. The German General Equal Treatment Act (AGG) does not recognize any exemption in this regard; as a rule, it is therefore unlikely to be justifiable.
However, (Ukrainian) nationality cannot found a presumption of discrimination on the grounds of racial and/or ethnic origin alone, but only in combination with other indications – especially common religion, common language, common cultural and traditional origins, and common living environment (German Federal Labor Court (BAG), judgment of November 23, 2017 – 8 AZR 372/16, in: NZA-RR 2018, 287 marginal no. 37). Therefore, employers who give preferential treatment to Ukrainian refugees based solely on their nationality need not fear a violation of German antidiscrimination laws.
Nevertheless, they should be aware of the consequences of a violation. The damage to be compensated under section 15 (1) German General Equal Treatment Act (AGG) is not negligible, given that the obligation to pay damages exists in principle in respect of all applicants and the damage to be compensated may amount to up to three months' salary (section 15 (2) sentence 2 AGG). Employers can minimize this risk by establishing internal rules and defining benchmarks that will be used to process job advertisements and applications.
Companies that contribute to solving societal problems strengthen their own position on the market
In today's world, social commitment is also becoming increasingly important for employers ("corporate citizenship"). Society now often expects companies to make a positive social contribution and be active in addressing social challenges. From a company point of view, positive publicity is likely another factor in favor of supporting social commitment. Given the legal difficulties employers must navigate, legal pitfalls have to be considered on a case-by-case basis, and we are happy to provide advice on how to avoid them.
Article co-authored by Yannick Spiegel