Hiring employees in Germany: Your employer checklist

Contents

1. Betriebsnummer: Apply for an employer business number

Before hiring your first employee, you need to get a Betriebsnummer (business number) from the Bundesagentur für Arbeit (federal employment agency). This number is necessary for meeting your responsibilities to the Krankenkasse (health insurance fund), like registering and unregistering employees or reporting breaks in employment. You can apply for this employer business number online at bno.arbeitsagentur.de.

What is a Betriebsnummer?

Betriebsnummer (business number) is a unique identification number given to businesses by the Federal Employment Agency in Germany. The business number is used for various administrative functions, such as fulfilling health insurance reporting requirements, registering and deregistering employees, and reporting employment-related changes. It is a key identifier for businesses when dealing with public authorities and agencies.

To apply for a business number, an employer/authorised representative can apply online to the Bundesagentur für Arbeit (federal employment agency) or, if it’s a mining or maritime company, to the Knappschaft-Bahn-See pension fund. The application requires details such as the business’s name, address, business activity and contact person. Once approved, the employer receives a letter confirming this. If you are hiring people to work in your home (e.g. housekeepers etc.) under the Haushaltsscheck-Verfahren (household cheque scheme), you only need to submit a form to the Minijob-Zentrale (Minijob centre).

Contact address for the Bundesagentur für Arbeit

Betriebsnummer-Service der Bundesagentur für Arbeit
(business number service of the Federal Employment Agency)
Eschberger Weg 68
66121 Saarbrücken
Tel: 0800 4 5555-20
Fax: 0681 988429-1300
betriebsnummernservice@arbeitsagentur.de

2. Mitarbeiter erfassen: What do you need to register an employee?

Once you’ve found someone you want to employ, you’ll need the following documents and information:

• Ausgefüllter Personalfragebogen (Persönliche Angaben, Angaben zur Beschäftigung, Steuer etc.)
  Completed personnel questionnaire (personal details, employment details, taxes, etc.)
• Personalausweis (Kopie oder Vorlage)
  Identity card (copy or original)
• Rentenversicherungsnummer (Schreiben des Rentenversicherungsträgers)
  Pension insurance number (letter from pension insurance company)
• Mitgliedsbescheinigung der Krankenkasse
  Health insurance certificate
• Steuer-Identifikationsnummer (Steuer-ID)
  Tax identification number (tax ID)
• Elektronische Lohnsteuerabzugsmerkmale (ELStAM) (Abruf über Datenbank der Finanzverwaltung)
  Electronic wage tax deduction certificate (ELStAM) (retrieved from the tax authorities’ database)
• Urlaubsbescheinigung des letzten Arbeitgebers 
  Holiday certificate from the previous employer (if applicable)
• Unterlagen für vermögenswirksame Leistungen 
  Capital formation documents (if available)
• Arbeits- und Aufenthaltserlaubnis (bei ausländischen Mitarbeitern)
  Work and residence permit (for foreign employees)
• Schwerbehindertenausweis
  Disability certificate (if applicable)
• Branchenspezifische Nachweise (z. B. Gesundheitsbescheinigung in Pflegeberufen, Fahrerlaubnis bei Berufskraftfahrern etc.)
  Sector-specific certificates (e.g. health certificate for nursing professions, driving licence for professional drivers, etc.)
• Nachweise über Zusatzqualifikationen (z. B. Staplerschein, Schweißerschein, REFA-Zertifikat)
  Proof of additional qualifications (e.g. forklift licence, welding licence, REFA certificate)

3. Arbeitsvertrag: Create a job contract

When you create an Arbeitsvertrag (employment contract), you’re outlining what tasks your employee should do and how much. This contract is crucial for you as an employer as it is the basis for evaluating the expected work. The details in the contract are important, especially if there are legal disputes with employees.

The contract must be in writing

In principle, you can hire employees initially without setting out the employment contract terms in writing. However, the law says that the essential details of the employment relationship must be set out in writing and handed over to the employee no later than one month after the start of work (Nachweisgesetz § 2(1)(4)).

What does an employment contract need to be valid?

• Name und Anschrift des Arbeitgebers
  The name and address of the employer
• Name und Anschrift des Arbeitnehmers
  The employee’s name and address
• Angabe des Arbeitsortes
  Place of work
• Beschreibung der Tätigkeit
  Job description
• Beginn des Arbeitsverhältnisses
  Start date of employment
• Dauer der Probezeit, falls vereinbart
  Length of probationary period, if agreed (maximum 6 months)
• Dauer des Arbeitsverhältnisses 
  Duration of employment (if it’s a fixed-term contract)
• Arbeitszeiten
  Working hours
• Jährlicher Urlaubsanspruch des Arbeitnehmers 
  Employee’s annual leave entitlement (minimum 24 working days)
• Kündigungsfristen
  Termination notice periods
• Höhe und Zusammensetzung des Arbeitsentgelts
  Amount and composition of the employee’s salary

Both parties must sign the contract in person. If you’re hiring employees for the first time, it’s a good idea to seek the advice of an experienced lawyer. Together, you can create a standard (template) contract for all new hires, which can be easily modified for each new employee. This will help you avoid mistakes in the contract’s content, which could result in compensation payments if the employee takes legal action.

Want to know more about creating employment contracts and specific clauses? This article is about what they need to contain in Germany.

4. Mitarbeiter anmelden: How to register new employees

Where to register

New employees are required to be registered with the following authorities:

• Sozialversicherung
  Social insurance/security
• Gesetzlichen Unfallversicherung (Berufsgenossenschaft)
  Statutory accident insurance (employers’ liability insurance associations)
• Finanzamt
  Tax office
• Gesundheitsamt
  Health authority (if applicable)

Sozialversicherung: Registering new employees for social insurance (security)

In principle, all employees in Germany are covered by ‘gesetzlich‘ (statutory):

• Krankenversicherung (health insurance),
• Pflegeversicherung (long-term care insurance),
• Rentenversicherung (pension insurance)
• Arbeitslosenversicherung (unemployment insurance)

Only certain occupational groups are exempt from the statutory insurance obligation. You can find out more about this from any health insurance company.

As a boss, you must share information with the Sozialversicherungsträger (this literally means social insurance carrier, i.e. social security agency/authorities). When you hire new workers, one of the first things you need to do is register them for health insurance. This is important so that you can start collecting social insurance contributions immediately. Also, if you have part-time workers with low wages (Minijobbers), their registration and fixed payments are taken care of by the Minijob-Zentrale (minijob central office). If you don’t register your employees for social security, or if you provide false or incomplete information to the authorities, whether accidentally or deliberately – it’s illegal. You could end up with a big fine.

For example, the following employees must be registered with the relevant health insurance funds:

• Employees with compulsory insurance (health, long-term care, unemployment and pension insurance)
• Employees who are exempt from insurance because they exceed the annual earnings limit
• Part-time employees
• Employees in partial retirement
• Employees who have reached the age of 65
• …

If in doubt, it is best to simply ask your health insurance fund whether you have to register the employee in question.

Which industries need to register their employees immediately?

Depending on the sector in which your business operates, you may be required to declare the hiring of new employees to the social security authorities immediately. The immediate registration must be made no later than the day the employee starts work. This rule applies to several industries, including:

• Bau- und Schaustellergewerbe
  Construction and fairground/carnival activities
• Gebäudereinigungsgewerbe
  Building cleaning industry
• Gaststätten- und Beherbergungsgewerbe
  Hotels and restaurants
• Betrieben der Personenbeförderung, Speditions- und Transportunternehmen
  Passenger, freight, and transportation companies
• Betrieben der Fleischwirtschaft
  Meat industry companies
• Forstwirtschaft
  Forestry industry

If you’re in doubt, your Sozialversicherungsträger (social insurance agency) can tell you what to do.

Do I need the employee’s Mitgliedsbescheinigung?

To register your new employee with the health insurance fund, you need their Mitgliedsbescheinigung (membership certificate) from their Krankenkasse (health insurance provider/fund) no later than two weeks after they start work. If you can’t get the certificate before the two-week deadline, you can register with the last Krankenkasse the employee was covered by. If asked, the employee must legally give you this information. If the employee did not have health insurance in Germany before being hired, he or she must choose one.

What is a Mitgliedsbescheinigung?

The Mitgliedsbescheinigung (membership certificate) shows your personal information, such as your name, gender and date of birth. It also includes the insurance number for the pension plan, which is also called the social security number.

Social insurance contribution and reporting process

The exchange of information in the  Beitragsfahren/Meldeverfahren  (contributions/reporting processes) between administrators and employers can only take place via encrypted data transfer. You can use system-tested and approved programs or automated tools. The use of Meldevordrucken (reporting forms) or Datenträgern (data storage carriers/devices/mediums) is no longer allowed.

Registering employees with statutory accident insurance

Employers must register new employees with the Berufsgenossenschaft (employers’ liability insurance associations), the statutory accident insurance organisation responsible for them. It makes no difference whether the new employees are trainees, employees or service providers. The statutory accident insurance contributions are paid by the employer alone. There is no employee contribution. As is the case with social insurance, payroll data can only be sent digitally to the relevant Berufsgenossenschaft (employers’ liability insurance association) or Unfallkasse (accident insurance fund).

Registering employees with the tax office

As a boss, you need to make sure you deduct and pay your employees’ taxes on time. When you hire someone new, it’s important to register them with the tax office right away. You can do this online via ELSTER (the tax office’s online portal) to register them for ELStAM. To do this, you’ll need the new employee’s date of birth and Steueridentifikationsnummer (tax ID number). When registering, you must also declare whether it’s their main job (tax classes 1 to 5) or a second job (tax class 6).

If the employee doesn’t have a Steuer-ID (the shortened term for tax ID number), you can get it online from the Bundeszentralamt für Steuern (federal central tax office). To deduct the correct amount of income tax, you need to find out the correct tax class. It’s a good idea to talk to a tax adviser about this.

Registering employees with the health authorities

If you run a business that produces, processes or sells food, such as catering services, restaurants, butchers etc., you must register your employees with the Gesundheitsamt (health authority). You’ll need a certificate from an Amtsarzt (medical officer) confirming that your employee is healthy enough to do the job safely.