Bureaucratic monster for employers? Employment contracts must comply with stricter requirements as of 1 August

Evidence Act: Employment contracts must be put to the test with regard to mandatory transparent working conditions

From 1 August 2022, the amended regulations of the Verification Act will apply. The background to this is the EU Directive 2019/1152 (Working Conditions Directive), which comes into force on 31 July 2019.

For employers, this means that they have to check their employment contracts to see whether they still comply with the new regulations. Unfortunately, the legislator has left many questions unanswered in the implementation of the directive, which is why we receive a large number of enquiries in this regard. For this reason, we briefly present the current state of affairs.

What has changed?

New Evidence Act: What has changed?

In addition to the previous requirements of the old Evidence Act, the following information must now be included or specified in the employment contract:

• the composition and amount of remuneration, including overtime pay, bonuses, allowances, premiums and special payments as well as other components of remuneration, each of which shall be stated separately. As well as their due date and the method of payment,
• the duration of the probationary period; in particular, in the case of a fixed-term employment relationship, the probationary period must be proportionate to the expected duration of the fixed term and the nature of the job,
• the agreed working time, agreed rest breaks and rest periods and, in the case of agreed shift work, the shift system, shift rhythm and prerequisites for shift changes,
• if agreed, the possibility of ordering overtime and its conditions,
• procedures to be followed by the employer and the employee in the event of termination of the employment relationship, at least the requirement of the written form and the time limits for the termination of the employment relationship, as well as the time limit for bringing an action for protection against dismissal; furthermore, it shall be included that section 7 of the Protection against Dismissal Act shall also apply in the event of improper proof of the time limit for bringing an action for protection against dismissal.
• in the case of an occupational pension scheme: Minimum information on the pension provider (name and address);
• General reference to the applicable collective agreements, works agreements and service agreements
• Possible entitlement to training provided by the employer
• Special regulations for work outside the FRG

To whom does the new Evidence Act apply?

The new Verification Act applies to all employers! As of 1 August, they must comply with the requirements of the Verification Act – for new employment contracts.

It is important to note in this context that according to the wording of the Evidence Act, employment contracts already existing before 1.8.2022 do not have to be amended. However, at the employee’s request, the employer must inform the employee of any new regulations – within 7 days.

What are the penalties for non-compliance with the Evidence Act?

In contrast to the old Evidence Act, violations are now sanctioned. Employers are now not only under considerable time pressure, but it can also be expensive if a report is made. This can happen during the next audit or through a “small tip from a dissatisfied employee”.

If a material term or condition of the contract or a minute or notice is

• at all,
• not right,
• not complete,
• not in the prescribed manner or
• not handed over in time,

a fine of up to 2,000 euros per violation may be imposed.
This applies to every employer, regardless of the size of the company.

How do we support compliance with the requirements of the new verification law ?

In general, we can help you with all these questions:

• Which contracts are to be adapted under which circumstances?
• Which deadlines apply in which case?
• What are the new mandatory disclosures?
• How can this all be optimally implemented in the short time available?
• What penalties should be avoided?

Leave your sample employment contract to us and we will take care of the rest, like:

• the review of your sample employment contract
• the proposal for additions or amendments to contractual clauses
• the drafting of an information letter for workers with “old” contracts

If desired, we will of course also fully review your sample contracts to ensure that the individual contract clauses are up to date.