Hiring employees in Germany
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Human resources management in a GmbH

Human resources management in a limited liability company (GmbH) is an essential component of corporate management. It requires in-depth knowledge of labor law and a precise approach to hiring, seconding, or leasing employees. Only by carefully adhering to legal regulations and drafting clear contracts can legal complications be avoided and a stable workforce be established.

Labor law in Germany

German labor law protects both employees and employers through a wide range of legal provisions. These not only affect employment relationships, but also social security contributions and regulations regarding working hours and termination.

Important legal provisions:

• employment contracts: Written contracts are required by law and must contain essential information.
• Working Hours Act: The daily working hours may not exceed 8 hours, but may be extended to up to 10 hours.
• Vacation entitlement: Employees are entitled to at least 20 days of vacation per year (for a 5-day week).
• protection against dismissal: If the company has more than 10 employees, a legal reason for termination is required.
• Social insurance: There is an obligation to pay contributions to pension, health, unemployment and accident insurance.

Hire employees

The GmbH can employ employees directly by drawing up an employment contract and registering the employee with the relevant social security authorities. Often, a probationary period of up to six months, during which the notice period is shorter. It is important that the salary is at least statutory minimum wage Further additional services such as Bonuses, health insurance and Pension contributions can be agreed as additional services.

Posting of employees

The secondment of an employee means that they work temporarily in another country, but remain employed by the original employer. During the secondment, the same working conditions apply as in the home country, supplemented by country-specific requirements. Special attention is paid to the international regulations on social security and taxationIn some cases, a A1 certificate required, which confirms the social security obligation in the sending country.

Employment of external employees

A GmbH can also employ external staff for temporary or project-related tasks. This is often done through a temporary employment agency, which acts as the formal employer. The temporary employment agency requires a special permit for temporary employment. The GmbH merely provides the workplace and pays for the work performed.

Engagement of freelancers

In addition to employing permanent and external employees, the GmbH has the option of freelancer for specific tasks or projects. When working with freelancers, it is crucial to Scope of work and the Remuneration must be precisely defined in the contract to avoid misunderstandings and legal conflicts. These contracts are generally not employment relationships, but rather service or work contracts.

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