Expanding Business to Germany with Employer of Record

Germany welcomes flocks of business owners every year and allows them to access the attractive German market.

16:45 06 January 2022

Situated in the western part of Europe, Germany holds the fourth rank in the list of the world's largest economies. But the country has the largest economy among the European countries. Especially focus on trading, Germany is a wealthy country. The country has built a strong business relationship with neighboring countries like France, Italy, Austria, etc. Germany is known for its export of manufactured goods. The country has skilled and highly innovative workers. Germany welcomes flocks of business owners every year and allows them to access the attractive German market.

 

Though Germany offers the best destination for business, it won't be a piece of cake for any business owner to expand a business in Germany without stepping foot in the country. That is why they partner with a German Employer of Record to ensure flawless business operation. The team of Employer of Record saves the valuable hours of the company and lets you focus on critical business tasks. In layman's terms, the Employer of Record is a third-party organization, and it deals with the administrative works related to employment. We have mentioned some EOR services through the below paragraphs.

 

Hiring in Germany

If you think of successfully expanding business in Germany, you will need to recruit local candidates from the country. Germany has some of the greatest universities in the world, and you are more likely to get the right talent for your company in Germany. The Employer of Record helps in onboarding the potential candidates. The EOR team also provides your company guidance regarding cultural norms to be followed during interviews. The Employer of Record assists you with the German labor laws during the hiring process.

 

Employee onboarding in Germany

Sometimes candidates are recruited from foreign lands. The Employer of Record helps these candidates with their work permits, visa, etc. The EOR arranges all the documents on behalf of the candidates and helps them decide which visa would be perfect for their situation. After this immigration process, the EOR sometimes make arrangement for a temporary stay in a foreign land also.

 

Working hours in Germany

You should know that Germany has a Working Hours Act. It states that the total working hours in a week should not cross the upper limit of 48 hours. On a particular day, a German employee can work up to 8 hours. But all the employees need a regular break after six hours of constant working. People in Germany are flexible with working on Saturdays. The Germany Employer of Record generally monitors the working hours and overtime of every employee.

 

Germany employment contracts

While recruiting in Germany, the Employment Contract needs to be detailed. That is why the Employer of Record Germany mentions everything starting from terms and policy of the company, duration terms, probationary period, job responsibility, remuneration details, work location to notice period. This gives the hired employees a crystal-clear idea about the job in your company. The EOR hand over the employment contract to the employees either during selection or post joining.

 

Probationary period

Probationary periods are permitted and commonly required in Germany but cannot exceed six months. During a probation period, the employer is required to provide a notice period of two weeks in case of termination of employment. Shorter notice periods are only permissible if a collective agreement provides for them.

 

German holidays

Germany provides its employees with ten official public holidays in a year. There are a few extra holidays for regional festivals. For these holidays, the employees receive a full day's salary. Employees are not entitled to extra pay if they are required to work on a public holiday, but they are entitled to a day of rest as compensation. Employees who work a five-day workweek are entitled to a minimum of 20 days per year in addition to public holidays, and those who work a six-day week are entitled to 24 days plus public holidays.

 

Employee benefits

In Germany, employees are not entitled to bonus payments in addition to wages; however, it is common for employers to provide additional payments in the form of gratuity, profit-sharing, supplementary pay, commission, and piecework rates. The most common type of gratuity in Germany is vacations allowance and Christmas bonuses. Other than the bonus, the employers are liable to pay for the health coverage of the employees.

 

Paid leaves

There are only sick leave and maternity leave for German employees. Both the male and female employee in Germany receives full sick pay for up to six weeks of illness. The Employer of Record strictly follows the Continuation of Remuneration Act set by the German government. For childbirth, the government asks employers to provide maternity leave for 8 to 12 weeks. The employer of record maintains a record regarding the leaves taken by the employees.

 

Termination

In Germany, the employment relationship can be terminated by an employer or employee for a good cause if certain conditions are met. Unfair dismissal protections apply to employees who have been employed for more than six months. Employees can only be fired for reasons such as misconduct or redundancy. Employer of required to give at least four weeks of notice to the employee before termination. Under collective bargaining agreements or works, council employees may be entitled to severance pay. The employer of record is responsible for handling everything related to employment. They handle on-time salary, bonuses, paid leaves, etc., from the very beginning of the company. Like all these, the EOR team also drafts the termination papers. They inform the employees about their termination and put them in a notice period. Even after termination of employment, the EOR constantly helps the ex-serviceman to clear their due payment and assists them with other employee benefit funds.

 

The German Employer of Record has a huge contact base which they use to help the client company every step of the way. At an affordable cost, the EOR shares the administrative responsibility with the parent company. If you wish to successfully run your business in the foreign land of Germany, you can't say 'no' to the Employer of Record Germany.