In a steadily moving world, immigration of foreign nationals for the purpose of employment keeps playing a crucial role in our economy. Although certain immigration constellations are created to enable a flexible and ad hoc business visit to Germany, foreign nationals coming to Germany bearing the intention to perform activities that are considered as work will generally be required to obtain an appropriate German work permit in order to do so. Employers hiring foreign nationals are therefore obliged to ensure compliance with German immigration regulations during the hiring process and the duration of employment. For the purpose of simplification, the right to stay and the right to work in Germany are combined in one permit- the work and residence permit (visa or electronic card including supplementary sheet). The main responsible authorities involved in this process are the German Consulates/Embassies abroad, the immigration offices in Germany as well as the Federal Employment Agency.
The work permit that will be issued as an entry visa by the German Consulate or as the final work and residence permit by the immigration offices in Germany always states the name of the employing entity in Germany – either the entity that hired the foreign national locally based on an employment contract or the host entity the foreign national has been seconded to for a certain duration while still being employed with the home country entity.
The entity mentioned on the German immigration document is considered as the “immigration employer” (in the following only employer). The employer is responsible for compliance with immigration obligations and regulations. This entity is in charge to provide information and proof in case of an audit and needs to make sure all employer immigration obligations and immigration requirements are taken care of.
Immigration employer obligations
German immigration law contains several obligations for the employer and the employee for the duration of employment or assignment in Germany. The overview below provides information about the most important obligations for employers. Complying with these obligations is crucial for the employer to minimize the risk of immigration compliance issues and therefore fines for the employer.
The basic principle that needs to be considered by the employer when employing or assigning a foreign national in/to Germany is equality. A work permit can be issued by German authorities if the foreign national is not employed under less favourable terms than a comparable local employee in an equivalent position.
Authorities review in detail all employment conditions relevant for the employment or assignment in Germany. This includes, for example, salary, working hours including overtime hours, notice period, vacation entitlement and many more.
The first obligation of the employer is therefore to make sure the foreign national is not working under less favourable terms. The information provided by the employer to the authorities involved in the work permit application process is a key factor.
It is worth highlighting that the German authorities are not only allowed to review compliance in regards to the equality obligation during the initial work permit application process. In addition to that, the Federal Employment Agency is allowed to perform an audit and review whether the working conditions comply with the requirements at any time during the employment or assignment in Germany. They can request copies of payslips, proof of working hours and overtime hours as well as vacation entitlement.
Obtaining information about German immigration and employment requirements such as minimum wage, minimum salary level, vacation entitlement, working hours and overtime hours prior to the employment or assignment is an essential step for the employer when it comes to immigration compliance.
Right to work check and copy of permit
What are the duties of an employer hiring a foreign national? There are two key obligations the employer needs to take care of.
As a first step, the employer needs to perform a “right to work check”. The employer is obliged to review the work permit of the employee and whether the employee is allowed to work for the employer in the planned position based on his work permit. The information is generally mentioned in the supplementary sheet whereas the electronic card indicates information regarding validity and personal details of the holder. It is crucial for this document to be issued correctly – enabling a person to be employed with a specific employer in a certain job position. Only when the correct employer and position are mentioned on the work permit is the employer allowed to let the employee start working within the validity of the document.
Secondly, the employer is obliged to store a copy of the foreign national’s valid work permit for the whole duration of the employment or assignment in Germany.
The above-mentioned obligations are the reason why employers have to make sure the onboarding of future foreign national employees is organized in a timely manner in order to ensure compliance. Should the work permit not bear the permission to work for the specific employer or in the specific position, the employee would be required to trigger an amendment application process with the respective authorities before being able to start working, which can take several weeks.
Equality also refers to the foreign nationals’ salary paid during the stay in Germany. The salary comparability test by German authorities is based on gross amounts.
The employer first needs to consider the minimum wage required in Germany, which is EUR 9,60/hour from 1st of July 2021 on and EUR, 9,82/hour from 1st of January 2022 on. It will be raised to EUR 10,45/hour starting on 1st of July 2022.”Employers are obliged to notify the early termination of the assignment or employment in Germany within 4 weeks from the time of knowledge to the respective immigration office in charge.”
As a next step, the employer needs to be aware of minimum salary levels applicable for certain permit types, the EU Blue Card for example requires a salary of at least EUR 56,800.00 gross/year and EUR 44,304.00 gross/year in case of a shortage occupation (for example IT jobs). For permit types that do not have specific salary threshold, the principle of equality is applicable again: The foreign national’s salary needs to be as high as the salary of a comparable employee.
If the base salary does not reach a certain required salary threshold, employers are empowered to add allowances in order to meet the minimum wage and minimum salary level requirements. These allowances need to be paid in equal amounts each month (proration is allowed for the days not spent in Germany); paid to the availability of the employee (no reimbursement); paid without conditions;
should not be assigned to a certain purpose (foreign national needs to be able to freely access the whole amount) and should be paid as remuneration for the foreign national’s work.
Only when these requirements are met, can the allowance be considered as part of the salary threshold required for the minimum salary level. Other allowances can be paid as well, but will not be taken into consideration by German authorities for the calculation of the required minimum salary level.
Monthly salary payments need to meet the salary amount stated in the initial work permit application. It is therefore important to keep in mind currency fluctuations – The employer is obliged to compensate a lower salary due to currency fluctuations.
Should the monthly allowance payment be lower than initially stated because the foreign national only spent a couple of days in Germany during this month, it should be flagged to German authorities during the extension application process or in case of an audit.
Students and interns
Each student holding an adequate German student permit is authorized to work in Germany for 120 full or 240 half days per calendar year. One full working day is considered as 8 hours whereas a working day of up to 4 hours is considered as a half working day. Students are untied to a certain employer or job position as the studies remain the prime occupation as well as the purpose of stay in Germany. Mandatory internships which are part of study regulations do not count towards the 120/240 rule while voluntary internships do.
Even though it sounds very relieving that immediate employment is possible without any restriction to a certain employer or a job position, employers need to be cautious in regards to the limited number of days students are allowed to work. In order to ensure compliance when hiring a student, a tracking system should be implemented to keep trace of the limited amount of allowed working days.
Employers are obliged to make sure that the students working days do not exceed the 120 full/240 days as it would otherwise be considered as illegal work resulting in fines for the employer and the student. The employer should furthermore review whether the internship is prescribed by the German authorities and is therefore mandatory or voluntary.
Early termination notification
Since the Skilled Immigration Act (Fachkräfteinwanderungsgesetz) came into effect on March 1 2021, obligations for the employer apply when it comes to the early termination of an assignment or employment in Germany.
Employers are obliged to notify the early termination of the assignment or employment in Germany within 4 weeks from the time of knowledge to the respective immigration office in charge. The obligation only applies when the employee is holding a work permit, not if the employee is holding a permit for another purpose of stay, for example family reunion.
“Time of knowledge” is the day the department which is in charge of foreign nationals and the review of work permits is aware of the termination of the assignment/employment. Discussing whether or not the termination will take place does not trigger the deadline, only once the department/manager makes a final decision or the employee informs the employer about his decision does the deadline of 4 weeks start running.
The consequences of illegal work in Germany should not be underestimated. Fines of up to EUR 500,000 depending on the obligation, exclusion from public tenders and government subsidies as well as liability for deportation costs are possible.
In severe cases which show repetitive illegal employment of foreign national employees, illegal employment of several foreign national employees at the same time or illegal employment of foreign national employees with less favourable conditions than German employees, imprisonment might be the consequence.
In order to prevent these significant compliance consequences, it is recommendable to either involve a legal professional who will be cooperating with the global mobility team in order to secure conformity with German immigration and labor law or to have an optimally trained global mobility team which would be able to accomplish the same.