German Labour Law: Contracts, Working Hours, and Dismissal

German labour law is a layered system of employee protections built on the Basic Law, the German Civil Code (Bürgerliches Gesetzbuch, or BGB), and a set of federal statutes covering hours, pay, leave, safety, and dismissal. Its core feature is that these rules set mandatory minimum standards. A private employment contract can offer more than the statute, but it cannot offer less, and clauses that try to are void. The result is one of the most heavily regulated employment environments in Europe, and both workers and employers need to understand where the floor sits.

How an Employment Relationship Starts

Under Section 611a of the BGB, you are in an employment relationship whenever you are personally dependent on an employer’s instructions and integrated into their work organization.¹ The Evidence Act (Nachweisgesetz) requires the employer to put the core terms in a signed writing: the parties, start date, duration, workplace, job description, and pay. Failing to hand over those written terms can cost the employer up to €2,000 per violation.

Most jobs open with a probationary period (Probezeit) of up to six months, during which either side can end things with two weeks’ notice. After that, the relationship is normally open-ended. Fixed-term contracts are allowed, but a fixed-term contract without an objective reason cannot exceed two years total and cannot be renewed more than three times inside that window. If you were previously employed by the same company on a permanent basis, a new no-reason fixed-term contract is generally not permitted.

At companies with more than 15 employees, you have a statutory right to request reduced hours under the Part-Time and Fixed-Term Employment Act (TzBfG) once you have six months of service. The employer can only refuse if the reduction would cause serious operational problems. Companies with 45 or more employees must also offer “bridge part-time,” which lets you cut hours for a defined period and then return to full-time.

Working Hours, Breaks, and Rest

The Working Hours Act (Arbeitszeitgesetz, or ArbZG) caps the regular working day at eight hours. It can be stretched to ten, but only if the average over six calendar months or 24 weeks stays at eight per day.² Breaking those limits is an administrative offence carrying fines of up to €15,000. Intentional violations that endanger health, or a persistent pattern of them, become criminal, with imprisonment of up to one year.

Breaks are mandatory. Shifts of more than six but no more than nine hours require at least 30 minutes of break; shifts over nine hours require 45. Between shifts you are entitled to an uninterrupted rest period of at least 11 hours. Work on Sundays and public holidays is broadly prohibited, with narrow carve-outs for sectors like healthcare, emergency services, and hospitality. Even then, the employer must grant a compensatory rest day.

Minimum Wage, Payslips, and Social Contributions

Since January 1, 2026, the statutory minimum wage is €13.90 per hour.³ The floor is set by the Minimum Wage Act (Mindestlohngesetz, or MiLoG) and applies to virtually every employee nationwide.⁴ For certain categories of employees, employers must document hours worked so compliance can be verified in government audits.

Every pay cycle, the employer must issue a detailed payslip under the Entgeltbescheinigungsverordnung, breaking down gross earnings, tax deductions, and social insurance contributions. Inaccurate or missing statements can trigger financial assessments from social security agencies.

Employer and employee split social insurance contributions roughly equally. For 2026 the combined rates are:

Pension insurance: 18.6% total, 9.3% each side
Health insurance: 14.6% base plus an average additional contribution of about 2.9%, split equally
Long-term care insurance: 3.4% base, 1.7% each. Childless employees aged 23 or older pay a 0.6% surcharge; parents with multiple children receive graduated discounts.
Unemployment insurance: 2.6% total, 1.3% each

The total burden runs to roughly 39% of gross wages, deducted at source.

Vacation, Sick Pay, and Special Leave

The Federal Leave Act (Bundesurlaubsgesetz, or BUrlG) guarantees at least 24 working days of paid vacation per year on a six-day working week.⁵ For the more common five-day week, that is 20 days. Contracts and collective agreements often push the figure to 25 or 30. Full vacation rights accrue after the first six months of employment.

Germany has nine public holidays nationwide, with federal states adding their own to reach between 10 and 13 depending on where you work. Bavaria and Baden-Württemberg sit near the top of that range; Berlin and Hamburg near the bottom. A public holiday falling on a working day does not eat into your vacation balance.

If you fall ill, the Continued Remuneration Act (Entgeltfortzahlungsgesetz) entitles you to 100% of your regular salary from the employer for up to six weeks, provided the employment relationship has already lasted four uninterrupted weeks. Beyond six weeks, the statutory health insurer pays Krankengeld at 70% of gross salary, capped at 90% of net.⁶ Krankengeld can continue for up to 78 weeks for the same condition within a three-year period.

Section 616 of the BGB gives you paid time off for short, unavoidable personal events such as the birth of a child, the death of a close relative, your own wedding, or urgent medical appointments. The statute itself does not specify how many days; contracts, collective agreements, or works agreements fill that in. The right cannot be eliminated outright unless a collective agreement explicitly does so.

Maternity and Parental Leave

The Maternity Protection Act (Mutterschutzgesetz) forbids employers from requiring a pregnant employee to work in the six weeks before her due date, though she can choose to continue. After delivery there is an absolute eight-week ban on work with no exceptions. For premature births, multiple births, or a child diagnosed with a disability, the post-birth protection period extends to 12 weeks.⁷ During maternity leave the employee receives full net salary through a mix of health insurance maternity benefits and an employer top-up.

Dismissal protection here is among the strongest in German law. The employer cannot terminate a pregnant employee from the moment the pregnancy is known until four months after delivery.⁷ The same protection applies after a miscarriage occurring after the twelfth week of pregnancy. Only in extraordinary circumstances unrelated to the pregnancy, like a complete business closure, can the occupational safety authority grant an exception.

After maternity leave, both parents can take up to three years of unpaid parental leave (Elternzeit) per child under the Federal Parental Allowance and Parental Leave Act (BEEG). At least 12 months must be taken before the child turns three; the rest can be used any time before the child’s eighth birthday. Special dismissal protection during Elternzeit begins eight weeks before the leave starts.⁸ Elterngeld (parental allowance) typically replaces 65% of previous net income, from €300 to €1,800 per month.

Anti-Discrimination Rules

The General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, or AGG) prohibits discrimination in employment on the basis of race or ethnic origin, gender, religion or belief, disability, age, or sexual orientation.⁹ It covers the whole arc of employment: job ads, interviews, working conditions, promotion, and dismissal. Discriminatory contract terms are void, and affected employees can bring compensation claims.

The rule matters most in hiring. Job ads cannot be worded to exclude candidates based on a protected trait. If a rejected applicant can show facts suggesting discrimination, the burden shifts to the employer to prove a legitimate, non-discriminatory reason. Claims must generally be brought within two months of the discriminatory act, which is a much shorter window than most employment claims.

Workplace Safety and the Disability Employment Quota

The Occupational Safety and Health Act (Arbeitsschutzgesetz, or ArbSchG) requires every employer to assess workplace risks and take protective measures covering physical and chemical hazards, equipment, ergonomics, and psychological stress. Employers must document the risk assessment, the protective measures, and any follow-up reviews. All costs sit with the employer; charging employees for safety measures is prohibited.¹⁰

Once you have been unable to work for more than six weeks (continuously or cumulatively) within a 12-month period, the employer must offer a Company Reintegration Management process (betriebliches Eingliederungsmanagement, or BEM) under Section 167 of the Social Code Book IX. It looks at adjustments that might help you return and prevent future incapacity. Your participation is voluntary, but if the employer never offered BEM, any later attempt to dismiss you for health reasons is much harder to defend.

Private and public employers with at least 20 positions must fill at least 5% of them with severely disabled employees.¹¹ Employers who fall short pay a monthly compensatory levy per unfilled position that rises as the gap widens:

3% to under 5% employment rate: €140 per unfilled position per month
2% to under 3%: €245 per unfilled position per month
Above 0% but under 2%: €360 per unfilled position per month
0%: €720 per unfilled position per month

The top tier was designed to push employers who had been ignoring the obligation altogether. Smaller employers with fewer than 60 positions face reduced rates, but the obligation itself remains. Levy assessments are due by March 31 each year, and late payment adds 1% per month.¹¹

Employee Data and Workplace Monitoring

Germany treats employee surveillance as a serious intrusion. Under Section 26 of the Federal Data Protection Act (Bundesdatenschutzgesetz, or BDSG), an employer may only process employee data when it is genuinely necessary for establishing, carrying out, or terminating the employment. “Useful” or “convenient” does not clear the bar. Courts apply strict scrutiny, and the constitutional right to informational self-determination reinforces the statutory rule.

Consent can be a legal basis, but it must be in writing, given before monitoring starts, and truly voluntary. Because of the power imbalance in employment, labour courts are skeptical of consent obtained by an employer. Where a works council exists, introducing any technical system capable of monitoring employee behavior or performance requires a formal works agreement (Betriebsvereinbarung) under Section 87(1)(6) of the Works Constitution Act.¹² The council can block such systems outright. Data collected without that agreement is typically inadmissible in court, so even genuine misconduct caught this way may not stand up as evidence. Employers must also run a Data Protection Impact Assessment under the GDPR, give transparent notice, and observe data minimization.

Works Councils and Co-Determination

The Works Constitution Act (Betriebsverfassungsgesetz, or BetrVG) lets employees in any establishment with at least five permanent, eligible workers elect a works council (Betriebsrat).¹² Workers themselves start the process, not management, and the employer cannot obstruct it or retaliate against participants.

Once in place, the council has real co-determination rights on social and personnel matters: work schedules, monitoring technology, overtime, and internal workplace rules. On individual decisions like hiring, job grading, and internal transfers, the employer must consult the council, and a decision made without required consultation is often void and can be overturned in labour court. Wages themselves are not on the council’s plate; those belong to trade unions and collective bargaining.

Termination and Dismissal Protection

This is the area where German law diverges most sharply from what employers elsewhere expect. Firing someone is not merely difficult; the procedural rules alone can invalidate a termination even when the underlying reason was legitimate.

Notice Periods

Section 622 of the BGB sets minimum notice periods that grow with length of service. During the first six months, typically the probationary period, either side can give two weeks. After that, the employer’s minimum starts at four weeks to the end of the month or the 15th, and scales up with tenure:

2+ years of service: one month
5+ years: two months
8+ years: three months
10+ years: four months
12+ years: five months
15+ years: six months
20+ years: seven months

All notice periods after probation run to the end of a calendar month. Contracts and collective agreements can extend these, but cannot go below the statutory floor.

Social Justification Under the KSchG

The Protection Against Dismissal Act (Kündigungsschutzgesetz, or KSchG) applies to any employee with more than six months of service at a company employing more than ten people. Once it applies, a dismissal is only valid if it is socially justified in one of three ways:

Person-related reasons, typically long-term illness or permanent inability to perform the job, and only after the employer has exhausted alternatives like reassignment or reduced duties
Conduct-related reasons, meaning a serious breach of contract, almost always requiring at least one prior formal warning unless the misconduct is severe enough that no warning could help
Operational reasons, meaning genuine business necessity such as restructuring or closing a department, where the position itself is eliminated

Operational dismissals carry an extra hurdle called social selection (Sozialauswahl). The employer must compare all employees in comparable positions and retain those who are most socially vulnerable, weighing four criteria: length of service, age, maintenance obligations for dependents, and severe disability. Getting the social selection wrong is one of the most common reasons employers lose dismissal cases.

Written Form and the Three-Week Deadline

Section 623 of the BGB requires every termination to be in writing with an original signature.¹ An email, text, WhatsApp, or scanned PDF has no legal effect. If it is not on paper with a wet-ink signature, the termination does not exist. Where a works council exists, the employer must consult it before issuing any dismissal, and skipping that step makes the termination void.¹²

If you believe a dismissal was unjustified, you must file a dismissal protection suit (Kündigungsschutzklage) in the labour court within three weeks of receiving the written notice. Miss that window and the termination stands, no matter how flawed it was. This is where most employees with a valid claim lose their case: on the clock, not on the merits.

Mutual Termination Agreements

Rather than dismissing unilaterally, employers often propose a mutual termination agreement (Aufhebungsvertrag) with a severance payment attached. These agreements bypass the dismissal protection framework entirely, which is precisely why they need to be handled carefully. Signing one usually triggers a 12-week blocking period (Sperrzeit) during which the Federal Employment Agency withholds unemployment benefits. The blocking period can sometimes be avoided if the agreement records that the employer would otherwise have issued an operational dismissal, but that takes careful documentation. Because the waiver of dismissal protection is irreversible, getting legal advice before signing is worth the delay.

1
German Civil Code. German Civil Code BGB
2
Gesetze im Internet. Arbeitszeitgesetz Section 3
3
Mindestlohnkommission. Current Level of the Minimum Wage
4
Gesetze im Internet. Minimum Wage Act
5
Customs online. Length of Holidays
6
gesund.bund.de. Sickness Benefit
7
Gesetze im Internet. Maternity Protection Act MuSchG
8
Familienportal des Bundes. Parental Allowance
9
Antidiskriminierungsstelle. General Equal Treatment Act
10
Gesetze im Internet. Act on the Implementation of Measures of Occupational Safety and Health
11
Bundesportal. Employer’s Obligation to Pay if the Planned Employment Quota for Severely Disabled People Is Not Reached
12
Federal Ministry of Labour and Social Affairs. Works Constitution Act BetrVG