www.akshaydabar.com  

Presented by: Akshay Dabar

Working in Germany (Labor laws, Social security and

Employee benefits)  

www.akshaydabar.com  

Outline:

1. Labor/Employment laws •  Facts About German •  Worker Rights •  Working Hours? •  Wages •  German Application •  Free Movement of Workers 2. Social security •  Health Insurance •  Pension Insurance •  Accident Insurance  •  Social Indemnity 3. Employee benefits •  Elterngeld  /  Parental Allowance in Germany •  Unemployment benefits •  Eligibility requirements

www.akshaydabar.com  

u Facts About German •  Most populous country in Europe (82 million) •  World’s third largest national economy •  Labor force: 43.05 million •  Unemployment rate of about 5.2% •  Much higher unemployment rate in eastern Germany than western

Germany •  Establishes legal rules primarily through “codes” rather than cases

u Germany: Provides Greater Worker Rights Than other countries

•  Strong job security by statute •  Broad range of mandated benefits •  Collective bargaining agreements cover a broad range of employees •  Works councils supplement employee voice at local level •  Co-determination

www.akshaydabar.com  

Working Hours?

•  German law sets 48 hours as the normal work week with 8 hours per day.

•  In certain cases of collective agreement however, the employee work week may be reduced to anywhere between 35 to 38.5 hours.

•  Expecting or nursing mothers may not work more than 8 hours a day •  In certain cases of collective agreement however, the employee

work week may be reduced to anywhere between 35 to 38.5 hours. •  Likewise, employees/trainees under the age of 18 may not work

more than 8 hours a day. •  Excluding those under 18 and nursing/pregnant women, employees

may have the work day extended up to 10 hours, provided that the average amount of hours per day remains at 8 for the following 6 months 

www.akshaydabar.com  

Minimum Working Hours

www.akshaydabar.com  

Labor cost/Productivity

www.akshaydabar.com  

u Wages

•  Germany does not have a statutory minimum wage. Nevertheless, collective agreements set a minimum wage for different industries/positions.

•  The employment contract determines the pay and this amount cannot be less than the minimum wage set forth by the applicable collective agreement.

u German Application •  Employer provided paid sick leave only to full-time workers •  Labor court ruled practice invalid

–  85% of part-time employees = women –  Second income justification insufficient; many part-time workers

dependent on such employment for livelihood

www.akshaydabar.com  

•  EU Treaty establishes right of workers to accept employment and move anywhere within EU

•  Allows workers to remain in other country post-employment under certain conditions

•  Can look for a job in another member country and work there without a work permit

•  Have right to equal treatment with nationals in access to employment, working conditions and all other social and tax advantages

•  Can have their family members join them with derived rights

Free Movement of Workers  

www.akshaydabar.com  

Social security:

•  Health Insurance •  Pension Insurance •  Accident Insurance  •  Social Indemnity

www.akshaydabar.com  

Health Insurance  

•  About 85% of the German population is insured under the Gesetzliche Krankenversicherung (GKV), the German version of a national health system

•  Employed persons making more than €4,687.50 monthly (€56,250 per year) have the option of either remaining in the statutory health insurance plan or taking out private insurance

www.akshaydabar.com  

Pension Insurance

•  This statutory old age insurance fund ensures that employees can maintain an appropriate standard of living when they retire.

•  Payments are generally made from age 65, and the maximum payout currently amounts to some 67% of average net income during the insured's working life

www.akshaydabar.com  

Accident Insurance

•  The statutory accident insurance system offers protection and assistance in the event of mishaps at work, or on the way to and from work.

•  Payments cover the costs of treatment and recuperation, pensions in the event of invalidity and funeral costs in the event of death.

www.akshaydabar.com  

Social Indemnity  

•  It is for persons whose adverse condition is considered the responsibility of the community, and is paid by the state.

•  Those covered include disabled war veterans, war widows and orphans, soldiers with service-incurred health problems and the victims of violent crime.

www.akshaydabar.com  

Employee benefits

u Elterngeld  /  Parental Allowance in Germany  

ü  Who Can Get Elterngeld?   • Employed, self-employed and bureaucrats • Unemployed parents  • Students and apprentices  • Parents of adoptive children 

ü  Eligibility for Elterngeld • Have a residence in Germany or an Aufenthaltserlaubnis (residence permit) that allows you to work in Germany  • You and your child reside together  • You care and rear your child personally  • You do not work more than 30 hours per week during the time Elterngeld is issued 

ü  How Much Is It?  • 67% of the applying parent's after tax earnings, averaged over 12 months before  

www.akshaydabar.com  

ü  the child's birth • Maximum amount monthly is 1,800 EURO  • Minimum amount issued to eligible applicants is 300 EURO (even for unemployed parents) • For each multiple birth, 300 EURO per child issued.

u Unemployment benefits •  physical existence, i.e. nutrition, clothing, household goods, decent accommodation,

heating, health and hygiene, as well as the possibility of maintaining interpersonal relationships and at least a minimum involvement in social, cultural and political life.

•    •  The educational and integration packages ensure that children, adolescents and

young adults receive at least the socio-cultural bare minimum. •  Health insurance •  Unemployed persons: with children receive 67%, •  without children, 60% of the net wage •  In 2014, this will be a maximum of EUR 5,950 per month in West Germany and •  EUR 5,000 in East Germany.

www.akshaydabar.com  

Eligibility requirements  

•  Eligibility requirements •  have registered at the labor office •  have applied for unemployment benefit •  have no job or you work less than 15 hours per week •  are available for work and are actively seeking for a job •  have been paying contributions for at least 12 months of the 2 years

before •  becoming unemployed. •  over 15 and under 65 •  are normally resident in the Federal Republic of Germany

www.akshaydabar.com