This article provides a short overview of the most significant changes to employment law that took effect in Germany in 2017.
By: Christoph Crisoll
Firm: KLIEMT.HR Lawyers
- The Maternity Protection Act has been extended and some provisions have been eliminated.
- The statutory minimum wage has been increased from EUR 8.50 to 8.84 gross per hour.
- The rights of temporary employees have been strengthened by limiting the maximum duration of temporary employment and equating temporary employees with permanent staff when it comes to payment. From 1 April 2017 onwards, temporary employees can be employed for a maximum of 18 months.
- The law on the representative body for severely disabled people was amended with effect from 30 December 2016, raising the requirements for dismissal of a severely disabled person.
- The new Payment Transparency Act gives employees access to detailed information on the remuneration of other employees of the opposite sex for the same or comparable work.
- The Workplace Ordinance has been adapted to the modern working world.
- The Flexible Pension Act has created incentives for employees to keep working just before reaching retirement age and beyond.
1. Maternity Protection Act (Mutterschutzgesetz)
On 30 May 2017, a new Maternity Protection Act came into force with various amendments and consolidation of related law.
Two of the main provisions came into effect on 30 May 2017: first, the period of protection for all rights (i.e. maternity leave and pay and protection against dismissal) increases from eight to twelve weeks if an employee gives birth to a disabled child. Second, if a woman suffers a miscarriage from the 12th week of pregnancy, she is entitled to a four-month term of protection against dismissal. In the past, she was only entitled to this protection if the stillbirth weighed over 500 grams.
Furthermore, since 1 January 2018, several additional provisions have taken effect. The Maternity Protection Act is now applicable to all women whose employment is subject to social insurance contributions such as managing directors, as well as pupils and students. This means that during the period of protection they are not obliged to attend school or lectures or take tests. Additionally, the protection against dismissal was extended to not only dismissal itself, but also ‘preparatory measures’ with regard to dismissals.
Until the end of 2016, the Maternity Protection Act provided a temporary ‘precautionary prohibition’ on employment for women who work in dangerous professions irrespective of their wishes. This has now changed so if a woman wishes to work, she can do. Similarly, night work continues to be prohibited for pregnant employees, but they may be allowed to work between 20:00 and 22:00 in future, provided they want to do so and can provide medical clearance. Furthermore, the law changed relating to occupational health and safety: Since January 2018, Companies are obliged to assess every activity for potential dangers to pregnant and breastfeeding women more closely.
2. Increase to Minimum Wage
A minimum wage of EUR 8.50 per hour has been in force under the Minimum Wage Act (Mindestlohngesetz) since 1 January 2015 for employees and most trainees. From January 2017, this has been increased to EUR 8.84, but there are still some exceptions in certain industries. A further increase of the minimum wage is expected in 2019.
3. Employee Lending Law (Arbeitnehmerüberlassungsgesetz)
From April 2017, companies have to hire anyone working on a temporary contract permanently after 18 months at the latest, unless there is a collective bargaining agreement containing different rules.
In principle, temporary workers should be paid the same as permanent staff, but industry-specific collective bargaining agreements can provide for a difference in pay for a maximum of nine months (under certain circumstances up to 15 months).
Temporary employees can also no longer be brought in as ‘strike breakers’ to replace people on strike or as a way of reducing a strike’s impact.
The new rules also close a loophole that allowed employers to characterise contracts as service contracts, when they should have been described as temporary contracts. The employer would enter into an agreement with a client to do a specific project, but then transfer its employees to the client to perform the services. At the same time, the employer would apply for a secondment permit as a precaution. This was possible because the law allows employers to apply for a general secondment permit that does not specify which employees will be seconded. Then, if an employee made a claim in court about his or her employment status (generally, wanting the protection afforded by the law on secondments) and it became obvious, that the employee had in fact been treated as a temporary employee, the employer would use the secondment permit to prove that the arrangement had in fact been a secondment all along, thereby avoiding the legal consequences of unlawful personnel leasing. This is no longer allowed and employers are required to make prior disclosure of a secondment. Failure to do so can be penalised by an administrative fine.
4. Law for the representative body of severely disabled people (Schwerbehindertenvertretung)
Since 30 December 2016 the representative body for severely disabled people has to be invited to a hearing prior to the dismissal of a severely disabled person. Otherwise, the dismissal itself will be invalid. Previously the penalty for failure to do so was a theoretical fine that was never actually imposed on employers.
A further change that entered into force on 30 December 2016 provides that if part of a business is split off, the representative body for severely disabled people remains in place in the split-off part until a new representative body has been elected.
5. The Payment Transparency Act (Entgelttransparenzgesetz)
On 11 January 2017, the Payment Transparency Act on equal pay for male and female employees came into effect. The Act aims at closing the gender pay gap and its main instrument is access to information on how much other comparable employees are paid for the same work. Employees of companies employing over 200 staff are entitled to request detailed information on the remuneration of other employees of the opposite sex for the same or comparable work. Companies must provide a written response to such requests. Unless they are bound by collective bargaining agreements, the request has to be answered within three months. Larger companies with more than 500 employees have to report regularly on their efforts to provide equal pay.
6. Workplace Ordinance (Arbeitsstättenverordnung)
The Workplace Ordinance (which came into effect in December 2016) consolidates several separate sets of regulations. It protects the health and safety of workers in various workplaces, including construction sites. The most important changes are as follows:
- There are now precise details for setting up to work at home.
- The instructions employers must give employees to follow for their health and safety and their obligation to inform employees about specific workplace hazards have been clarified and specified.
- From 2017 onwards, psychological stress must be taken into account when assessing workplace hazards.
- Every workplace must have a window. This applies to permanent workplaces and large social areas. It does not apply to sanitary facilities. Also, if structural or operational conditions do not allow for a window, an exemption is possible (certain exceptions are listed in the Ordinance).
7. The Flexible Pension Act (‘Flexirentengesetz’)
The Flexible Pension Act, which came into force on 1 January 2017, is intended to introduce more flexibility into the change from working life to retirement, making it more financially attractive for employees to keep working in the years before reaching the statutory retirement age and even beyond.
The Act makes it more attractive to combine a partial old age pension with part-time employment before reaching retirement age. Pensioners can also increase their pension entitlement by continuing to pay pension contributions after reaching the statutory retirement age.