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Doing business in Germany: Staff welfare

02 March 2012
by Ina Dimireva -- last modified 30 March 2012

Social support in Germany is handled via the individual branches of social security: statutory medical, healthcare, pension, unemployment and accident insurance. The legal basis is provided by the Social Security Code (Sozialgesetzbuch) and the specific Acts.


Staff welfare

Legal requirements

The Social Security Code:

Book II: Basic insurance for job-seekers

Book IV: Common provisions for social insurance

Book V: Statutory medical insurance

Book VI: Statutory pension insurance

Book VII: Statutory accident insurance 

Social legislation

Entry into the social security system is via the medical insurance scheme. Germany has statutory medical insurance funds and private healthcare insurers which run in parallel. Statutory medical insurance funds are obliged to accept all applicants, whereas private insurers may also turn them down. It is not always possible to switch between a private and a statutory medical insurance scheme. Self-employed people can choose between voluntary, statutory or private medical insurance. The healthcare reform of 1 January 2009 made insurance compulsory for all residents in Germany.

Book V: Statutory medical insurance

Accident insurance

Employees are insured by statutory accident insurance against accidents at work and occupational illnesses; the providers of statutory accident insurance are the industrial and agricultural employers' liability insurance associations (Berufsgenossenschaften) and public-sector accident insurance providers. The members of the employers' liability insurance associations are the companies themselves. Employees themselves are required to help prevent accidents.

Social Security Code, Book VII: Statutory accident insurance

Equal treatment

The General Equal Treatment Act outlaws discrimination on the grounds of race or ethnic origin, gender, religion or belief system, disability, age or sexual identity.

General Equal Treatment Act

Labour law

Health and safety at work

The Labour Protection Act [Arbeitsschutzgesetz] of 21 August 1996, which is the main basis for occupational health and safety in Germany, obliges the employer to provide a suitable labour protection organisation and to carry out a risk assessment, i.e. to assess the working conditions in the company from the point of view of labour aspects. In addition to this national labour protection, there are also accident insurance providers in Germany (a 'dual system'). According to Section 14 of Book VII of the Social Security Code (SGB VII), accident insurance providers have to use all appropriate means to prevent accidents at work, commuting accidents, occupational illnesses and work-related health risks. The protection of young workers is regulated by the Act Protecting Young People in Employment [Jugendarbeitsschutzgesetz]. Rules on working hours are contained in the Working Time Act [Arbeitszeitgesetz].

Labour Protection Act

Act on company doctors, safety engineers and other occupational safety experts (ASiG)

Book VII of the Social Security Code (SGB VII)

Hazardous Substances Regulation

Biological Agents Regulation

Workplace Regulation

Regulation on protection against noise and vibration at work

Industrial Health and Safety Regulation

Load Handling Regulation

Youth Employment Protection Act

Working Time Act

Posting employees

The Employee Posting Act applies when workers are posted to Germany. It obliges the employer to provide certain mandatory labour conditions for their employees for the duration of the secondment at the relevant place of employment in Germany. The Act requires both employers based in Germany and those based abroad to comply with certain legal provisions on working conditions. Working conditions agreed through collective agreements may additionally be laid down for certain industries listed in the Act and made binding by a declaration of their generally binding nature or a legal regulation. These must then be complied with by both employers based in Germany and those based abroad.

Employee Posting Act

Mandatory social rules complete the requirements related to managing staff.

Businesses are free to go beyond the minimum social legal requirements at their own initiative.

Administrative procedures

Social security system

Employers are required to pay contributions for pension, medical, unemployment and care insurance. The German pension fund [Deutsche Rentenversicherung] checks this every four years.

Employers must also enrol their staff on the medical insurance scheme; this in turn handles registration with unemployment and pension insurance schemes. Everyone insured for pension insurance receives a social security ID. In some industries, this must be carried at all times (e.g. construction, hotels and restaurants). The employer has to advise the employee at the outset whether the social security ID has to be carried.

Overview of social security

The various providers (pension insurance companies, sickness insurance and care schemes, and for accident insurance, the industrial and agricultural employers' liability insurance associations and public-sector insurance providers) are responsible for implementing the individual branches of social insurance.

The Data Collection and Transmission Regulation determines what data relevant to social insurance you have to collect and send to the appropriate insurers. It also contains regulations on the mandatory electronic procedure on employers reporting notices and their proof of contributions.

Procedure for transmitting data to social security providers

Source: European Commission

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