Since 30 July 2020, new regulations apply to the posting of workers to Germany (as well as to the posting of workers to other EU member states). The EU Directive 2018/957 amending the Posted Workers Directive 96/71/EC, has – after a lengthy legislative process – been implemented into German law. The resulting amendments to the German Posted Workers Act (Arbeitnehmerentsendegesetz, AEntG), which regulates the rules concerning the posting of workers to Germany, came into force on 30 July 2020. Some of the main changes for employers are summarised below.
General working conditions
The following new provisions on certain working conditions contained in laws, regulations and administrative provisions pursuant to § 2 AEntG must be applied to employment relationships between an employer domiciled abroad and his employees employed in Germany:
- Regulations on remuneration including overtime rates without the regulations on company pension schemes (§ 2 para. 1 no. 1 AEntG; under the old AEntG, only the minimum remuneration rates including overtime rates were applicable). “Remuneration“ refers to all components of the remuneration whichthe employee receives from the employer in cash or in kind for the work performed, in particular the basic remuneration, including remuneration components linked to the type of work, qualification and professional experience of the employee and the region, as well as allowances, supplements and gratuities, including overtime rates. In addition, regulations on the due date of remuneration including exceptions and their prerequisites must be applied (§ 2a AEntG).
- Regulations on requirements for employees‘ accommodation,if such accommodation is provided (directly or indirectly, whether for payment or free of charge) by the employer for employees who are working away from their regular workplace (§ 2 para. 1 no. 5 AEntG).
- Regulations on allowances or the reimbursement of costs to cover travel, accommodation and subsistence costs for employees who are away from their place of residence for professional reasons (§ 2 para. 1 no. 8 AEntG).
Offsetting posting allowances against remuneration
Posting allowances, i.e. allowances for the time spent working in Germany, can, in principle, be offset against the remuneration pursuant to § 2 para. 1 no. 1 AEntG. However, this does not apply to reimbursements of posting costs, i.e. costs actually incurred as a result of the posting, in particular travel, accommodation and subsistence costs (§ 2b para. 1 AEntG).
Employers should also be advised to expressly regulate in a contract – e.g. in the employment contract – which components of a posting allowance are paid as reimbursement of posting costs or which components of a posting allowance are part of the remuneration (§ 2b para. 2 AEntG). If this is not included in the contracts between employer and employee, it is irrefutably presumed that the entire posting allowance is paid as reimbursement of posting costs (§ 2b para. 2 AEntG).
Posting of more than 12 or 18 months
If an employee is employed in Germany for more than 12 months by an employer domiciled abroad, all working conditions whichare prescribed at the place of employment in Germany by legal and administrative provisions and by generally binding collective agreements (§ 13b para. 1 sentence 1 AEntG) apply to this employment relationship. Excluded from this are the procedural and formal requirements and conditions for the conclusion or termination of the employment relationship, including post-contractual non-competition clauses, and company pension schemes (§ 13b para. 1 sentence 1 AEntG).
The employer can extend the period after which the additional working conditions begin to apply to 18 months by notifying the competent authority of the customs administration in text form (e.g.e-mail) in German, which must contain the following information (§ 13b para. 2 AEntG)
- surname, first names and date of birth of the posted workers,
- place of employment in Germany (for construction services, the construction site),
- the reasons for exceeding the 12-month period of employment in Germany and
- the probable duration of employment in Germany at the time of notification.
When calculating the 12- or 18-month period, special attention must be paid to a replacement of the posted employee: If the employer who is domiciled abroad replaces the employee employed in Germany with another employee who performs the same work at the same location, the duration of employment of the replaced employee and the replacing employee must be added together (§ 13b para. 7 AEntG). If they exceed the 12- or 18-month period, the additional working conditions – as described above – must be applied.
Notification requirements in the case of cross-border lease of temporary workers
Furthermore, new notification requirements have been introduced in the case of cross-border lease of temporary workers (with certain exceptions):
- Before a lessee based abroad employs a temporary worker in Germany, he must inform the lessor of this in text form (§ 15a para. 1 AEntG).
- Before a lessee based in Germany or abroad employs a temporary worker from a lessor based abroad in Germany, he must inform the lessor in text form of the essential working conditions (including remuneration) which apply to comparable workers in the lessee’s operation (§ 15a para. 2 AEntG).
Certain posted workers are excluded from the scope of some provisions of the AEntG in the case of shorter postings (§ 24 AEntG). Furthermore, the latest amendments do not apply in the road transport sector to employers domiciled abroad who, as road transport operators in Germany, employ workers as drivers or co-drivers (§ 27 AEntG).
Employers should therefore pay close attention to which – new or old – regulations are applicable when posting to Germany, because even negligent non-compliance can result, among other consequences, in fines of up to € 500,000.00 (§ 23 AEntG).