Working in Germany

(Labor laws, Social security and

Employee benefits)  

Presented by:
Akshay Dabar

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Outline:
1. Labor/Employment laws
•  Facts About German
•  Worker Rights
•  Working Hours?
•  Wages
•  German Application
•  Free Movement of Workers
2. Social security
•  Health Insurance
•  Pension Insurance
•  Accident Insurance 
•  Social Indemnity
3. Employee benefits
•  Elterngeld  /  Parental Allowance in Germany
•  Unemployment benefits
•  Eligibility requirements

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u Facts About German
•  Most populous country in Europe (82 million)
•  World’s third largest national economy
•  Labor force: 43.05 million
•  Unemployment rate of about 5.2%
•  Much higher unemployment rate in eastern Germany than western
Germany
•  Establishes legal rules primarily through “codes” rather than cases

u Germany: Provides Greater Worker Rights Than other

countries
•  Strong job security by statute
•  Broad range of mandated benefits
•  Collective bargaining agreements cover a broad range of employees
•  Works councils supplement employee voice at local level
•  Co-determination

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 Working Hours?
•  German law sets 48 hours as the normal work week with 8 hours per
day.
•  In certain cases of collective agreement however, the employee
work week may be reduced to anywhere between 35 to 38.5 hours.
•  Expecting or nursing mothers may not work more than 8 hours a day
•  In certain cases of collective agreement however, the employee
work week may be reduced to anywhere between 35 to 38.5 hours.
•  Likewise, employees/trainees under the age of 18 may not work
more than 8 hours a day.
•  Excluding those under 18 and nursing/pregnant women, employees
may have the work day extended up to 10 hours, provided that the
average amount of hours per day remains at 8 for the following 6
months 

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Minimum Working Hours

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Labor cost/Productivity

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u  Wages
•  Germany does not have a statutory minimum wage. Nevertheless,
collective agreements set a minimum wage for different industries/
positions.
•  The employment contract determines the pay and this amount
cannot be less than the minimum wage set forth by the applicable
collective agreement.

u German Application
•  Employer provided paid sick leave only to full-time workers
•  Labor court ruled practice invalid
–  85% of part-time employees = women
–  Second income justification insufficient; many part-time workers
dependent on such employment for livelihood

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Free Movement of Workers
 •  EU Treaty establishes right of workers to accept employment
and move anywhere within EU
•  Allows workers to remain in other country post-employment
under certain conditions
•  Can look for a job in another member country and work there
without a work permit
•  Have right to equal treatment with nationals in access to
employment, working conditions and all other social and tax
advantages
•  Can have their family members join them with derived rights

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Social security:
•  Health Insurance
•  Pension Insurance
•  Accident Insurance 
•  Social Indemnity

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 Health Insurance
 
•  About 85% of the German population is insured under the
Gesetzliche Krankenversicherung (GKV), the German version
of a national health system
•  Employed persons making more than €4,687.50 monthly
(€56,250 per year) have the option of either remaining in the
statutory health insurance plan or taking out private insurance

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 Pension Insurance
•  This statutory old age insurance fund ensures that employees
can maintain an appropriate standard of living when they
retire.
•  Payments are generally made from age 65, and the maximum
payout currently amounts to some 67% of average net income
during the insured's working life

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Accident Insurance

•  The statutory accident insurance system offers

protection and assistance in the event of mishaps at
work, or on the way to and from work.
•  Payments cover the costs of treatment and
recuperation, pensions in the event of invalidity and
funeral costs in the event of death.

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 Social Indemnity
 
•  It is for persons whose adverse condition is considered
the responsibility of the community, and is paid by the
state.

•  Those covered include disabled war veterans, war

widows and orphans, soldiers with service-incurred
health problems and the victims of violent crime.

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 Employee benefits

u Elterngeld  /  Parental Allowance in Germany

 

ü  Who Can Get Elterngeld?

 
• Employed, self-employed and bureaucrats
• Unemployed parents 
• Students and apprentices 
• Parents of adoptive children 
ü  Eligibility for Elterngeld
• Have a residence in Germany or an Aufenthaltserlaubnis (residence permit) that
allows you to work in Germany 
• You and your child reside together 
• You care and rear your child personally 
• You do not work more than 30 hours per week during the time Elterngeld is issued 
ü  How Much Is It? 
• 67% of the applying parent's after tax earnings, averaged over 12 months before  

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ü  the child's birth
• Maximum amount monthly is 1,800 EURO 
• Minimum amount issued to eligible applicants is 300 EURO
(even for unemployed parents)
• For each multiple birth, 300 EURO per child issued.

u Unemployment benefits
•  physical existence, i.e. nutrition, clothing, household goods, decent accommodation,
heating, health and hygiene, as well as the possibility of maintaining interpersonal
relationships and at least a minimum involvement in social, cultural and political life.
•   
•  The educational and integration packages ensure that children, adolescents and
young adults receive at least the socio-cultural bare minimum.
•  Health insurance
•  Unemployed persons: with children receive 67%,
•  without children, 60% of the net wage
•  In 2014, this will be a maximum of EUR 5,950 per month in West Germany and
•  EUR 5,000 in East Germany.

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Eligibility requirements
 
•  Eligibility requirements
•  have registered at the labor office
•  have applied for unemployment benefit
•  have no job or you work less than 15 hours per week
•  are available for work and are actively seeking for a job
•  have been paying contributions for at least 12 months of the 2 years
before
•  becoming unemployed.
•  over 15 and under 65
•  are normally resident in the Federal Republic of Germany

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