In Germany there are numerous laws governing business activities. The employment and social insurance legislation is of particular significance for companies wanting to set up business in Schleswig-Holstein.
Germany has many rules and regulations in the field of employment law, e.g. on continued remuneration of employees, vacation and leave, termination of contract periods, protection against dismissal, working hours, parental leave, employing young people and the minimum wage. A contract of employment can be concluded informally, unless some legislation or collective bargaining agreement lays down exceptions. But generally speaking it is always better to go for a written contract of employment. The parties to the contract can agree on which law shall be applicable. If no law is specified, a contract of employment will be subject to the law of the country in which the employee usually works, even if he or she has been temporarily sent to work in another country. If an employee does not usually work in one and the same country, the law of the country where the branch of the company who has employed that person is situated shall be applicable. If you need any further information about employment law in Germany, please contact us by e-mail or phone.
Social insurance legislation
Germany’s social insurance system covers the following statutory insurance schemes:
- Pension insurance (a)
- Unemployment insurance (b)
- Medical insurance (c)
- Nursing care insurance (d)
- Occupational accident insurance (e)
These insurance schemes apply to all employees in Germany whose income is below a specific statutory level.
Half of the contributions to the insurance schemes a) to d) are paid by the employer. The premium for the occupational accident insurance scheme (e) is paid entirely by the employee. The other half of the contributions to the insurance schemes a) to d) is deducted from the employee’s monthly pay and transferred to the respective social insurance carrier by the employer.
Foreign citizens are not fundamentally exempt from the obligation to pay social insurance premiums unless they are in temporary employment. However, there are numerous intergovernmental social security agreements that come into effect when a foreign employee leaves Germany.
WTSH will be glad to arrange for the right contacts to suitable specialists if you need more information about social insurance issues.