Key Changes in Labor Law Starting in 2025

1. Fourth Bureaucracy Relief Act (BEG IV)

  • Electronic Employment Contracts: Employers can now provide essential terms of employment electronically, such as via email, replacing the requirement for signed paper documents. This simplifies employment administration, especially for international hires. Exceptions apply in high-risk industries or when an employee explicitly requests written documentation.
  • Electronic Employment References: Employers are also allowed to issue employment references electronically, which reduces administrative overhead and streamlines processes.

2. Minimum Wage Increase and Minijob Adjustments

  • Minimum Wage: The statutory minimum wage has been increased to €12.82 per hour. Employers must ensure all employees are compensated accordingly.
  • Minijob Earnings Threshold: To align with the new minimum wage, the monthly earnings threshold for Minijobs has been raised to €556. This allows employees in marginal employment to work approximately 43.36 hours per month without exceeding the limit.

3. Parental Leave in Text Form

  • Starting May 1, 2025, employees can submit parental leave applications in text form, such as via email. This simplifies the process for employees and reduces administrative tasks for employers.

4. Compensation Levy under SGB IX

  • Employers with at least 20 positions are required to employ at least 5% individuals with severe disabilities. If the quota is not met, a compensation levy applies, with the following structure:
    • €140 per unfilled position for an employment rate between 3% and less than 5%.
    • €245 per unfilled position for an employment rate between 2% and less than 3%.
    • €360 per unfilled position for an employment rate between 0% and less than 2%.
    • €720 per unfilled position if no individuals with severe disabilities are employed.

Recommendations for Labor Law Practitioners

1. Employment Contract Updates

  • Ensure employment contracts are updated to comply with the BEG IV, particularly regarding electronic formats for essential terms of employment.
  • Verify that contracts reflect the increased minimum wage and corresponding adjustments to working hours for Minijob holders.

2. Payroll Adjustments

  • Update payroll systems to accommodate the new minimum wage and Minijob earnings thresholds, ensuring accurate calculation of wages.

3. Internal Policy Revisions

  • Revise internal policies to align with changes in parental leave application procedures and electronic documentation standards.
  • Strengthen compliance mechanisms to meet disability employment quotas and avoid compensation levies.

4. HR and Management Training

  • Conduct training sessions for HR and management teams to ensure they are familiar with the latest legal requirements and their practical implications.

5. Compliance Audits

  • Perform audits to verify adherence to the new regulations, particularly regarding wage compliance, electronic documentation, and disability employment quotas.

By addressing these changes proactively, employers can ensure legal compliance while fostering an adaptable and fair workplace environment. Labor law practitioners play a vital role in guiding organizations through these transitions effectively.


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