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Expanding your business into Germany brings its own challenges, especially when it comes to local laws that differ from the employer’s country. Germany's labor laws are known to be employee-friendly, and as an employer, it’s important to understand these differences to make sure you stay compliant in your employee’s home country. This guide breaks down the key aspects of German paid leave laws so you can be well-prepared to manage your team effectively.
In Germany, employees working a 5-day week are entitled to a minimum of 20 days of annual leave. The length of this leave is often higher in practice, with many employers offering 25-30 days off per year. It's important to note that employers can deny leave requests based on operational needs or if other employees have already booked the same period off. Also, annual leave typically has to be used within the calendar year (though recent labor court decisions allow for some flexibility in carrying over unused leave to March 31 of the next year).
Employers aren't required to provide paid vacation during the first 6 months of employment. If an employee has taken paid leave days at a previous job within the same year, that time is counted against their annual leave at their new company. For example, if the employee took 5 days of paid leave with Company A in 2023 and then moved to Company B, 5 days will be discounted from their paid leave balance with Company B for 2023. The prior employer must verify the amount of leave already used with the worker’s new employer.
Germany observes 9 national public holidays as a country, with additional regional holidays in different states. The state with the most public holidays is Bavaria, where employees are entitled to 13 public holidays. Other federal states have between 10 and 12 days per year. Any work performed on a public holiday may be subject to extra time off or overtime pay.
A standout feature of German labor law is the provision for unlimited sick leave. For the first 6 weeks of an illness, employers are required to pay the employee’s full salary. After this period, health insurance takes over, paying a significant portion of the salary.
Expecting mothers in Germany are entitled to leave 6 weeks of paid leave before the birth and 8 weeks after, with the period extending to 12 weeks for premature or multiple births. The amount of pay received is determined by the employee's salary 3 months before the leave, with a maximum daily rate set by law (although employers typically pay the difference between this allowance and the employee’s usual salary).
Pregnant women and new mothers also receive:
Instead of Paternity Leave, Germany offers Parental Leave which is more flexible. This state-funded parental allowance amounts to 65% of the employee's average income from the previous 12 months, ranging from €300 to €1,800 monthly. The payment applies for the first 12 months of parental leave, or 14 months if the father takes a minimum of two months leave.
All parents (natural or adoptive) can take up to 3 years of unpaid leave until the child turns three. They can also reserve up to 12 months of this leave to use later, anytime before the child turns 8. This leave is available to all employees, regardless of their employment type, and guarantees job protection and the same work hours after the leave is over.
Since July 1, 2015, parents have the option of “Parental Allowance Plus”, which extends the allowed leave period up to 24 months, or 28 months if shared between both parents. Although, the pay amount for Parental Allowance Plus is half of the standard rate.
Short-term Carer's Leave: Employees are entitled to up to 10 days of unpaid leave for short-term caregiving needs. During this time, no social insurance contributions are required, but the employee's insurance coverage remains active. Employees are protected against dismissal from the time they notify their employer of their impending leave.
Long-term Carer's Leave: For more extended care requirements, employees can take up to 6 months of leave. Employers need a minimum of 10 working days' notice, and employees won’t make social insurance contributions while on leave (but can still receive benefits from health insurance and unemployment funds). Employees are protected against dismissal from the time they notify their employer of their impending leave.
Employees are entitled to 3-5 days of paid leave each year for urgent family matters.
In the event of a close relative's death, employees typically receive 2 days of bereavement leave.
For work-related injuries, employees are covered by statutory accident insurance. The leave is paid for the first 6 weeks after the injury.
Understanding and adhering to Germany’s paid leave laws is crucial for any employer operating in the country. These laws not only ensure compliance but also demonstrate your commitment to providing a supportive and fair work environment. By staying informed and considerate of these regulations, you can foster a positive and productive workplace culture that resonates with the values of your German team.
If you’re planning to expand your team to Germany, adhering to Germany’s paid leave laws is crucial. By staying informed and considerate of these regulations, you can foster a positive and productive workplace culture that resonates with the values of your German team.
For global businesses, navigating these laws requires a deep understanding and expert guidance. Consider partnering with Remofirst as your Employer of Record to handle your international payroll and HR needs in 170+ countries. Explore our Germany Country Guide for additional insights on hiring and managing employees in Germany.
