Paperless Office No More – New Red Tape for Employers in Germany

On June 23, 2022, the German Bundestag passed a bill to transpose the EU Directive on Transparent and Predictable Working Conditions into German law. By August 1, 2022, companies will have to comply with a comprehensive catalog of new obligations.

One key aspect is the obligation to issue the essential terms of employment to the employee – at the latest one month after the start of work – in written form, a wet-ink signed hard copy! Non-compliance is punishable by a fine. Does this spell the end of (already incomplete) digitalization and the paperless office in the workplace?

1. What additional information will employers need to provide?

For all employment relationships starting after July 31, 2022, additional information must be included in the employment contracts. Important to note is that the employer must record these in writing (i.e., a hard copy signed in wet ink). An electronic signature is not sufficient. This led to criticism of the draft bill, which, however, was adopted unchanged nonetheless.

The mandatory content of employment agreement includes:

• the duration of the probationary period;
• the due date for salary payment;
• the agreed working hours;
• agreed rest breaks and the possibility of instructing overtime;
• any company pension entitlements;
• in the case of agreed shift work, the shift system, the shift rhythm and the prerequisites for shift changes;
• the procedure to be followed when terminating employment, at least the reference to the written form requirement and the notice periods, as well as the deadline for filing an action for protection against unfair dismissal.

2. What happens in case of non-compliance?

Under the current law there was already an obligation to provide employees with a written version of key terms of the employment agreement, but there were no actual sanctions in case of violations. The new sanctions in case of non-compliance now open a new chapter for employers:

Employers failing to lay down one of the essential terms of employment correctly, completely and in the prescribed manner (i.e., in a wet-ink signed hard copy), or in a timely manner, can be punished with a fine of up to EUR 2,000 per violation. This can quickly become expensive in case of repeated and systematic non-compliance.

3. What about the existing employment relationships?

The new law has one final catch: All current employees will be entitled to request a written document (read: not an electronic document, but wet ink on paper) containing all the information above. The employer will then have seven days to comply and hand over these documents. This will be especially burdensome for employers without any HR staff on the ground.

However, there will be no fine for employers for violations of this obligation, if they fail to comply with the seven day deadline.

4. The three most important takeaways for employers

• The new law will apply from August 1, 2022, so the preparation time is relatively short.
• Update your template employment agreements for future use. Depending on your current template, you will probably need to add a provision on the deadline for filing an action for protection against unfair dismissal.
• Be prepared to comply with requests from existing employees for written employment agreements. A template can be prepared for this as well.

If you want to retain a (mostly) paperless office, there might still be some wiggle room. Please get in touch with our employment law team in Germany if you want to know more.