The German legislator had to implement an EU directive on 1st August 2022, which aims to promote transparent and more predictable employment ("Working Conditions Directive"). For this reason, the amendment of several laws has now been decided at very short notice, including the amendment of the Law of Proof of Substantial Conditions Applicable to the Employment Relationship (Nachweisgesetz). This is relevant for all companies that have employees in Germany and affects every employment contract.
In the future, violations of the Nachweisgesetz will constitute an administrative offense that can be punished with a fine of up to EUR 2,000.
The scope of application of the Nachweisgesetz will be extended to all employment relationships, and the previous privileged treatment of temporary help will no longer apply.
In future, employers will be obliged to set down in writing further essential contractual conditions in addition to those already specified in Section 2 of the Nachweisgesetz, for example:
- the possibility for the employee to freely choose his or her respective place of work (if this has been agreed)
- the composition and amount of remuneration, including overtime pay, bonuses, allowances, premiums and special payments as well as other components of remuneration, each of which must be stated separately, their due dates and the method of payment;
- the agreed working hours, agreed rest periods and rest breaks and, in the case of agreed shift work, the shift system, the shift rhythm and the preconditions for shift changes;
- the procedure to be followed by the employer and the employee when terminating the employment relationship, at least the written form requirement and the deadlines for terminating the employment relationship, as well as the deadline for filing an action for protection against dismissal.
All essential contractual conditions within the meaning of the Nachweisgesetz (hereinafter also referred to as "mandatory information") must be recorded in writing - i.e. signed by the employer and the employee - and handed over to the employee in the original (electronic form is excluded!).
When concluding a new employment contract, the employee must be provided with a written record of certain mandatory information on the first working day, while other mandatory information must be provided within seven working days or one month. However, dividing the information into three separate notifications is not likely to make sense as a rule. Instead, it is advisable to include all mandatory information in the employment contract at the latest at the start of employment.
If the employment relationship already existed before 1st August 2022, the additional obligations to provide evidence only have to be fulfilled if the employee requests the employer to do so. In this case, a written, signed list of the essential contractual conditions is sufficient to fulfill the obligation to provide evidence; a new version of the employment contract is therefore not mandatory in this case.
A change in the essential terms of the contract (e.g. salary or working hours) must generally be communicated to the employee in writing no later than the day on which it takes effect. This applies equally to new employment relationships and those that already existed before 1st August 2022.
What is to be done now?
Because employers will face a fine in the future if they violate the Nachweisgesetz, it is advisable to adapt the sample contracts used to date to the new legal requirements. This is also an opportunity to bring the samples "up to date". We will be happy to help you with this.
In addition to the amendment to the Verification Act, the implementation of the EU Directive will bring further important changes, in particular to the Part-Time and Fixed-Term Employment Act (TzBfG) and the Professional Training Act (BBiG). If you have any questions, please do not hesitate to contact us.
