The 7 Most Important Types of Employment Contracts in Germany and Their Requirements

There are several types of employment contracts in Germany, which vary according to the duration of each contract. To obtain one, a set of basic requirements must be met.

You must specify the employment period and the required working hours in order to define the nature of the job and the responsibilities involved.

Through Europedia24, we will present the different types of employment contracts, how to obtain them, and all the requirements associated with them.

German Employment Contract Law

Labor law is the foundation for regulating all types of employment contracts in Germany. Therefore, every person working within a company must comply with the regulations related to the type of work, working hours, and the way the required tasks are carried out.

An employment contract in Germany is an agreement concluded between two parties—the employer and the employee—under which work is performed and assigned tasks are completed in exchange for a salary or wage.

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All matters related to employment are regulated under Section 631 of the German Civil Code (BGB). The concept of performance is not limited to manual tasks or tangible work only; it also includes the following activities:

• Construction work.
• Chemical investigations.
• Repair services.
• Skilled trade services.
• Transportation services.
• Software development.

Contents of Employment Contracts in Germany

To protect employees’ rights, it is important to understand what employment contracts in Germany contain. The main contents include:

• Job description: The type of work performed by the employee and the required duties must be clearly defined.
• Schedule: The timeline for completing the work must be specified, as well as the dates on which salary payments will be made.
• Compensation: The amount of compensation the employee will receive for performing the required duties must be agreed upon when signing the contract.
• Termination procedures: The rules and conditions for terminating the contract must be clearly stated in case either party wishes to end the agreement before the specified term expires.

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Advantages of Employment Contracts in Germany

Employment contracts in Germany offer many different advantages. Although each type of contract has its own specific benefits, there are several common advantages, including:

1. The relationship between the company and the workforce is clearly regulated, with all parties protected by law.
2. Protection of the terms negotiated and agreed upon by both parties.
3. Clear identification of the agreed work and the nature of the required duties, which are explicitly defined in the contract.
4. Job security and protection against sudden unemployment or unexpected termination of employment.

Requirements for Employment Contracts in Germany

There are several basic requirements that must be included in employment contracts in Germany for them to be considered valid, signed by both parties, and legally recognized. These requirements include:

• Specifying the start date and duration of employment.
• Probation period.
• Type of activity or job.
• Place of work.
• Regulations regarding working hours and overtime.
• Bonuses and special payments.
• Obligation to provide notice and supporting evidence in cases of inability to work.
• Determining vacation dates.

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Types of Employment Contracts in Germany

Germany offers many different types of employment contracts that you can choose from according to your needs, the nature of the job, working hours, and other factors. The types of employment contracts in Germany are as follows:

Permanent contract

A permanent contract is an employment agreement that does not specify a fixed duration or an end date. This common type of employment contract in Germany has many advantages, including:

1. Possibility of career advancement and promotions.
2. Eligibility for bonuses and salary increases.
3. Working hours are defined in the contract, typically up to 40 hours per week, or 8 hours per day.
4. The employee can resign at any time by submitting a notice to the relevant party.

Temporary contract

A temporary contract is an agreement with a fixed duration, specified in years or for a defined period. It is one of the important types of employment contracts in Germany, and its advantages include:

• The contract duration does not exceed 24 months.
• The employment period can be extended.
• Employees under this contract cannot advance through the standard career progression system.
• Eligibility for bonuses and incentives.

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Part-time contract

A part-time contract can be either fixed-term or open-ended, meaning it may become a permanent contract. Its advantages include:

1. Reduced working hours compared to full-time employment, with a lower salary based on the number of hours worked.
2. Working hours can be reduced from 40 hours to 25 or 30 hours per week.

Side contract

A side contract allows the employee to work for limited periods during the month. Its advantages include:

• The monthly salary for this type of contract does not exceed €450 for 8 working hours per week.
• This type is considered the preferred option for both employers and employees.
• Employers are not required to pay monthly taxes on this arrangement.

Freelance contract

A freelance contract is not bound by a fixed salary or a specific duration. Instead, it is characterized by flexible terms for both the worker and the employer. It is considered one of the best types of employment contracts in Germany, and its other advantages include:

• The wage for this contract is calculated based on the hours required to complete the assigned work and the hours actually worked by the employee.
• The worker cannot receive promotions or career advancement within a structured job ladder.
• The worker must pay all applicable taxes independently.
• The worker under this contract is not covered by standard employee protection laws.

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Internship contract

An internship contract is specific to trainees, where the employer agrees to train the worker for a certain period. Its conditions include:

• The worker cannot receive bonuses or incentives during the training period.
• No promotions can be granted during the training period.

Probationary contract

A probationary contract is one of the types of employment contracts in Germany. It is a trial and evaluation period to assess the employee’s skills, seriousness, and overall discipline at work. Its advantages include:

• The employer decides during the probation period whether the employee will be hired permanently based on performance.
• It is an important evaluation period for assessing the employee’s ability to perform the job.
• If the employee successfully completes the probation period, they may obtain a permanent employment contract.

In general, it is important to be aware of the latest updates regarding retirement age in Germany to ensure proper future planning.

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Overtime and rest breaks in Germany

Employees are entitled to a 30-minute break if they work more than 6 consecutive hours, and a 45-minute break if they work more than 9 hours.

If the employee is a minor, they are entitled to a 30-minute break after 4.5 hours of work and 60 minutes after 6 hours of work.

It should be noted that break times are unpaid, except for short breaks that do not exceed 5 minutes.

Overtime refers to hours worked beyond the normal working hours agreed upon in the employment contract between both parties.

If overtime hours are not included in the employment contract signed between both parties, you have the right to refuse to work overtime.

How to terminate employment contracts in Germany

If you want to terminate an employment contract in Germany at any time, you must write a termination letter in a specific format and send it to the designated authority.

The termination letter must be sent to your workplace supervisor or to the human resources department, and it must be properly signed with your full name.

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The letter must include the following information:

• Full name and address.
• Contract number.
• A statement of what is to be terminated and the specified period.
• Cancellation of direct debit authorization.
• Signing the contract.
• Sending a written confirmation of receipt.

Of course, employment contracts in Germany can be terminated for employees if the employee fails to perform all required duties, as well as in cases of inappropriate behavior at work.

Work contract visa in Germany

Despite the variety of employment contracts in Germany, you need to obtain a work contract visa (also known as an employment contract visa) if you are a non-EU citizen. It is issued by the German embassy or consulate.

Requirements for a work contract visa in Germany

• The work contract visa must be valid and extendable.
• The employer must provide proof of a job offer along with evidence that no suitable candidates are available within Germany.
• Compliance with work restrictions.
• The employee must obtain a residence permit to live and work in Germany.
• If the employer wishes to change the employee, a new work visa must be applied for.
• The work visa can be canceled if its terms and conditions are violated.

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Frequently asked questions about employment contracts in Germany

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