Fit for 2024: Important legal changes for employers | Ius Laboris

[co-authors: Miriam Siemen, Anja Dachner]*

A number of important changes for employers in Germany took effect at the beginning of 2024. We provide an overview of the changes that have already come into force and also give an outlook on upcoming and planned legislative changes in 2024.

Legislative changes that have already taken effect

The following legislative changes took effect at the beginning of the year:

• Increase in the minimum wage, the minimum training allowance (MAV) and the marginal earnings threshold for ‘mini-jobs’. From 1 January 2024, the statutory minimum wage will rise to EUR 12.41 per hour. On 1 January 2025 it will rise again to EUR 12.82. The MAV for trainees not covered by collective agreements will also increase to EUR 649 per month in the first year of training, EUR 766 in the second year, EUR 876 in the third year, and EUR 909 in the fourth year. The marginal earnings threshold for mini-jobs was also raised to EUR 538 per month.
• Increase in the contribution assessment thresholds and the equalisation levy. The income thresholds for health, long-term care and pension insurance have also been raised. The income threshold for health and long-term care insurance will rise to EUR 62,100 per year. The contribution assessment ceiling for general pension insurance will rise to EUR 89,400 per year in the new federal states and to EUR 90,600 per year in the old federal states. The equalisation levy for severely disabled employees has increased significantly from EUR 320 to EUR 720 per workplace and month.

Other legal changes coming into force in 2024

The following other changes in the law have either taken effect or are coming into force this year:

• Expiry of the implementation period of the whistleblower law. The transitional period for setting up an internal reporting office in accordance with the new whistleblower law (‘HinSchG’) for employers with at least 50 employees expired on 17 December 2023. If an employer has not set up such an internal reporting office, fines of up to EUR 20,000 may be imposed.

• Possibility to take sick leave by telephone. As was already the case during the pandemic and intended for minor infections, employees have been able to take sick leave by telephone from their doctor for a maximum of five calendar days since 7 December 2023. Unlike during the pandemic, this option is not only available for respiratory illnesses, but also for other illnesses if there are no severe symptoms and the sick person is already known to the doctor’s office.

• Changes to child sickness benefit. Each parent can receive the child sickness benefit for up to 15 days per year (previously 10 days) for each legally insured child under the age of 12. The special coronavirus regulations, which allowed up to 30 working days, expired on 31 December 2023. The amount of the child sickness benefit remains unchanged.

• New notification procedure for parental leave. Since 1 January 2024, the employer must notify the health insurance fund immediately of the start and end of parental leave. Previously, there was only an obligation to provide an ‘interruption notification’.
• Expiry of the inflation compensation premium. Employers can continue to pay the inflation adjustment premium (IAP), which is exempt from tax and social security contributions, up to a maximum amount of EUR 3,000 until the end of 31 December 2024.

• Entry into force of the Skilled Immigration Act. The Skilled Immigration Act has been gradually coming into force since 18 November 2023. The ‘new EU Blue Card’ will make it easier for skilled workers with vocational training or an academic qualification to obtain a residence and work permit. In addition, further regulations will come into force from March and June 2024, including the recognition of foreign professional qualifications and the introduction of an ‘opportunity card’.

• Extension of the scope of application of the Supply Chain Due Diligence Act. Since 1 January 2024, the Supply Chain Due Diligence Act (‘LkSG’) has applied to companies that generally employ at least 1,000 employees (in 2023, the threshold was 3,000 employees). Violations of the LkSG can result in fines of up to EUR 800,000.

Outlook for upcoming legislative proposals in 2024

What further changes can we expect to see in 2024? Here are some highlights.

• Reform of the Working Hours Act. Since the 2022 landmark decision of the Federal Labour Court on the recording of working time, the Ministry of Labour and Social Affairs (BMAS) has been working on the reform of the Working Time Act. So far, only a draft bill from April 2023 is available. It is therefore unlikely that the law will be amended in the first quarter of 2024.

• New regulation on works council remuneration. The ‘VW judgment’ of the Federal Court of Justice on the criminal liability for breach of trust in the event of excessive works council remuneration has not only caused uncertainty in many companies, but has also brought legislators onto the scene. The proposed legislation would extend the basic standard for safeguarding the remuneration of works council members. It would also make the general prohibition of discrimination and favouritism more specific. The government bill has been passed and will now be forwarded to the Bundestag and Bundesrat.

• No news on the Employee Data Protection Act. The Employee Data Protection Act proposed by the BMAS had already been announced for 2023, but so far it is nothing more than a key issues paper. The Act is essentially intended to regulate the monitoring and control of employees in the workplace as well as data processing and transfers within the corporate group. It is not yet possible to predict whether and when a draft bill can be expected in 2024.

• Introduction of the Federal Collective Bargaining Compliance Act. With this proposed Act, the BMAS is pursuing the goal of only awarding federal public contracts of around EUR 10,000 or more to companies that comply with the working conditions set out by the BMAS in the relevant collective agreements. The previous draft bill from May 2023 has been hotly debated, including its conformity with EU law. The Act should be introduced in 2024. A draft bill is not yet available.

• Introduction of the Bureaucracy Reduction Act. This Act, which is intended to reduce bureaucratic hurdles, is expected to be passed in 2024. The key issues paper from October 2023 provides for particularly practice-relevant changes. In particular, the obligation to provide evidence of the essential contractual terms is to be waived for most sectors to the extent that the employment contract has already been concluded in a statutory electronic form that replaces the written form.

• Introduction of the Family Start Time Act. The proposed Family Start Time Act is intended to implement the EU Directive on work-life balance for parents and carers and promote the reconciliation of work and family life. In future, employed partners will be entitled to paid leave for a period of ten working days following the birth of a child. Contrary to the original plan, the law did not come into force on 1 January 2024, but is still being coordinated by the ministries, and the financing of the leave also needs to be clarified.

• No news on the amendment to the European Works Council Directive. There is no update on the discussed amendment to the EU Directive on European Works Councils. A corresponding legislative project has not yet been initiated, meaning that no change is to be expected in the foreseeable future.

Takeaway for Employers

The recent changes to German labour laws and regulations are significant, and 2024 promises to be an active year for further changes. Employers should keep an eye on these developments.

*Kliemt.HR Lawyers

ncG1vNJzZmivp6x7q7DSrqermV6YvK57y56emqSemsS0e8Wiq2aen6d6c3yRbWSipaCkv7Wtza1kpZ2Xlrlur8eapaCdo2KCeX%2BPaWhvZw%3D%3D