German employment contracts: what a compliant Arbeitsvertrag needs

The Nachweisgesetz, the law on written employment terms, requires the essential conditions of the job to be recorded in writing. A compliant Arbeitsvertrag sets these out clearly so both sides know where they stand.

• The parties, the start date and the workplace
• A description of the role and duties
• Pay, including any bonuses or allowances
• Working hours and rules on overtime
• Paid leave, at least the statutory minimum
• Notice periods and any probation
• Any collective agreement that applies

Missing terms do not void the contract, but they can create disputes and expose the employer, so getting the written record right at the start is worth the effort.

Most German contracts are open-ended, unbefristet, which is the default and the strongest form for the employee. A fixed-term contract, befristet, is allowed but limited. Without an objective reason it can run for a maximum of two years, with a small number of extensions inside that window. With a genuine objective reason, such as covering parental leave, it can run longer.

Part-time work, Teilzeit, follows the same rules on a pro-rata basis, and marginal Minijob employment has its own earnings threshold. The type you choose shapes the notice and renewal rules that follow.

A probation period, the Probezeit, can run for up to six months. During it, either side can end the contract on a shortened notice of two weeks, which gives both the employer and the employee an easier exit early on.

Probation is not automatic. It has to be agreed in the contract, and it cannot be longer than six months. After it ends, the ordinary notice periods and, where it applies, full dismissal protection take over.

Many sectors in Germany are covered by a collective agreement, a Tarifvertrag, negotiated between unions and employers. Where one binds your business, it can set minimum pay, working hours, leave and other terms above the statutory floor, and the contract has to respect it.

Checking whether a Tarifvertrag applies to a role is part of drafting the contract properly. Ignore one that binds you and the employee can claim the better terms it provides, regardless of what the contract says.

The essential terms have to be provided in writing, and while an English-language contract can be used, the terms must be clear to the employee, so a German version is common and often wise. The written record has to be in place around the start of employment.

Alongside the contract, the employee is registered with their health insurer and the social insurance system before the first payroll. As an employer of record we handle the contract and these registrations together, so nothing is missed at the start.