Becoming an employer in Germany can be a bit of a culture shock for foreign entrepreneurs, especially those coming from a more hire and fire oriented US jurisdiction. German labour law is highly regulated. We explained the rules regarding employee protection against dismissal here and described the risky issue of “Fictitious Self-Employment” here. Another fact, that many American or Asian employers can’t get their head around is the amount of holidays German employees are entitled to. Here are the basics of statutory vacation entitlement in Germany:
Statutory minimum vacation (holiday entitlement) for employees in Germany is regulated by the Bundesurlaubsgesetz (Federal Labour Vacation Act). This mandatory minimum vacation is, however, less than it appears at first glance: Section 3 BUrlG states that the minimum amount of vacation per year is 24 work days. However, since “work days” is (for historic reasons) still defined as including Saturdays, in practice this means the statutory minimum is only 20 days if someone works a five-day-week, which pretty much everybody does nowadays. Therefore, the mandatory minimum of 20 days has in practical life no real relevance because most employers voluntarily grant more than that. Also, if the respective business/industry is regulated by collective trade agreements (union agreements) these collective labour agreements stipulate significantly more vacation days per year. In most cases (depending on age and duration of employment) between 26 and 30 days. This is the reason why most Germans do, in fact, have six weeks of vacation each year. And if you wish to hire a qualified employee he/she will simply expect you to grant annual vacation somewhere in that area.
In addition to this there are, of course, also “gesetzliche Feiertage”, i.e. public holidays, the exact number of which differs from region to region, depending on whether the respective state is historically more catholic or more protestant. You can find a list of public holidays here.
In case you still consider being an employer in Germany, this posting explains how German employment agreements are drafted. Other articles on German labour law are available here and in the brochure “Living and Working in Europe”
The law firm Graf & Partners (Germany) assists entrepreneurs and businesses with their international expansion to Germany since 2003. Also, we have a network of professionals in the areas tax, IT, marketing and business consulting. Do not hesitate to contact us by calling solicitor Bernhard Schmeilzl at +49 941 785 3053 or send an email to: mail [at] grafpartner.com