Benefits of Hiring Employer Of Record In Germany

Germany is a country in central Europe bordering the Baltic and the North Sea with a strong economy. International corporates and employees feel that they can gain a firm footing and explore ample opportunities for future growth in that country. However, a company may face quite a few administrative hurdles that can deter them from entering the German market or attracting investors. An EOR can help the company save time and money, as they can begin their operations without having to employ a team onsite. The EOR assists the company with hiring people since they are familiar with German labor laws, salaries, hiring terms, and conditions. 

Germany has a unique and expansive workforce that includes experienced, English-speaking candidates as well as freelancers and fresh graduates. Since it is known to have exclusive employment rights worldwide, the EOR helps foreign candidates looking for better opportunities by giving them significant help with their immigration process. All in all, it completely lays the foundation for a foreign company in Germany with minimum risk and expenditure. 

The entire recruitment process is completed in days, helping the company start working with ease and convenience. It also helps the management focus on other important issues during the initial stages of its operations. By working in total compliance and collaboration with the local authorities, EOR Germany helps deliver direct services to foreign corporates so that they can achieve and sustain long-term development.

·         Contract of Employment 

The EOR will help the company with the onboarding process by easing quite a lot of stress during the initial stages of its inception. They take charge of everything right from examining local contracts to finalizing employee agreements. They make it easy to discuss and finalize employment information, salaries, bonus, payroll, employee benefits, leaves, and other related terms and conditions. New employees can view all relevant information in these documents in German and any other local language. Most importantly, employees can easily approach the EOR if they have any queries about their existing contracts, payroll, or other related issues. 

·         Working Hours in Germany

Every employee is expected to clock in eight hours of daily work, making it a total of 35 to 40 hours for a 5-day week. The daily working time does not exceed eight hours, while workers are discouraged from working on Sundays and public holidays. A list of public holidays is generally used while drafting this point for more convenience. According to the Working Hours Act, employees in Germany will follow an eight-hour/day schedule from Monday to Friday, not exceeding more than 48 hours a week. All employees will be given regular breaks after a maximum of six hours of work. 

·         Types of Leaves

The German Employer of Record keeps a proper record of employee leaves during their entire service. Each employee is eligible for 24 days of leave in a year, including holidays. Leave periods are pretty flexible and can differ according to the leave type and total years of service. For example, anyone can claim sick leave of up to 6 weeks after completing a month of service. Female employees can avail of maternity leave covering the entire pregnancy and four weeks after giving birth. Male and female employees may also offer to work part-time for up to three years after the birth of a child. 

·         Employee Termination and Procedure 

Employees who serve more than six months enjoy protection from being dismissed unfairly. The company will have to issue a four-week notice to terminate an employee, and the notice period will increase with the years of service. An employee can be terminated from service immediately in case of serious misconduct on his/her part resulting in an Extraordinary Termination of service. Freshers and new employees are put on probation for 6 months after joining, during which time they can be asked to leave with a two-week termination notice. 

·         Insurance and Taxes

Germany provides universal health insurance for all employees under the national security system. Executive employees can request additional health and life insurance or health allowance instead of additional coverage. Employer of Record Germany helps employees and their dependents avail of cost-effective insurance coverage at better rates. At the same time, every individual employed in Germany is required to pay income tax depending upon the income he/she earns. Those with a minimum income of around 9,000 euros are taxed at 14%, while people who belong to higher income groups are taxed more heavily. An individual whose income surpasses 54,950 euros may end up paying almost up to 42% taxes. Those with higher incomes are charged ‘wealth tax’, which is around 45% for incomes of 2,60,533.  

It can be rightly said that the Employer of Record Services Germany is a great help for companies with expansion plans in Germany. It will help document every procedure right from hiring suitable candidates, eligibility for leave, payroll processing, and conditions for employee termination. Appropriate knowledge of statutory laws and terms of employment will help the company gain a firm footing in a foreign country.