German Work Culture
To do business in Germany, it is vital to have a good understanding of its business or work culture. Making the right impression with the right people is the key to success in Germany, and it is important to back this up with the right research on the market and potential business associates.
As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about the German work culture, we want to support your global expansion plans. Therefore, we will address all aspects of the work culture in Germany to start your expansion well-informed.
Germans have the reputation of being modern, liberal, and cultured, and their working practices are formal and professional. Employees in Germany are also often viewed as working fewer hours but being more productive. Communication between peers generally relates to their work, not out-of-office activities.
Nevertheless, there is a growing appreciation of striking a work/life balance through flexi-time and taking opportunities for remote working, but in the office itself etiquette still plays a key role. Here are a few tips and working practices you should be familiar with before starting on your expansion:
- Hierarchy: German business culture has a well-defined and strictly observed hierarchy – with clear responsibilities and distinctions between roles and departments.
Work ethics in Germany include structuring the work force on the basis of qualifications and experience, where higher-qualified and more experienced employees go on the top of the hierarchy and the lesser qualified and newbies go on the bottom of the hierarchy.
- Work Relationships/Friendships: Work relationships are considered very important in Germany, but friendships aren’t developed too quickly.
- Introductions: In Germany, introductions tend to be formal. Using ‘Herr’ or ‘Frau’ is the norm. If speaking German, use the formal version of ‘you’ (Sie), unless invited to use the informal ‘Du’. Shaking hands is also common during introductions.
- Dress Code: Dress is similarly formal, men wearing dark suits, white shirt, with a solid tie; women wearing dark suits, white blouse, or a formal dress. Only remove jacket if your German colleague does so.
- Punctuality: In Germany, appointments and meetings are precisely planned and is expected for set times to be adhered to. Being punctual is a matter of good manners.
- Negotiations: Business communication is generally carried out in formal language, and negotiating a sale or contract is a fair, well-mannered, and well-planned process. Germans are not sold on flashy behavior and prefer the presentation of data for evidence to claims.
- Agreements: The decision-making process is quite lengthy in Germany, due to the hierarchical structure of many of its businesses. Verbal agreements and handshakes bond an agreement. However, most agreements are in writing. It is also expected of business associates to act on their part of the deal, as unreliability is looked down upon.
- Communication: In Germany, locals communicate directly and explicitly, and they do not ‘sugar-coat’ their statements. This can make them appear rude or threatening, even though this is not their intention. They also do not easily recognize or respond to verbal subtleties.
- Meals: Business meals are used to cement relationships, not generally to discuss deals.
Germany Minimum Wage
The German national minimum wage, by law, is €9.50 an hour. Any contract or work agreement for an amount below that may be invalid. However, many industries and sectors set their own minimum wages based on collective agreements within their sectors.
If the minimum wage is not paid, employees can make a claim for the difference between their actual pay and the minimum wage from their employer. Violations of the Minimum Wage Act can trigger fines of up to €500,000.
The government reviews the minimum wage bi-annually. The statutory minimum wage applies to all employees over the age of 18. Under certain conditions, interns may also be entitled to the minimum wage.
Probation in Germany
The employment contract must specify when your employment begins and the length of the probationary period. In Germany, the probationary period usually makes up the first three months of employment, with the maximum probationary period being six months. During this time, the employment relationship can be terminated by either party with two weeks’ notice.
Working Hours in Germany
The average working week in Germany is between 36 and 40 hours over a six-day period, Monday to Saturday. The maximum statutory limit for working hours is eight hours per day and 48 hours per week, averaged over six months. However, under certain circumstances it can be extended to 10 hours.
Most full-time jobs are seven or eight hours a day over five days a week, with an hour or 30 minutes’ rest at lunchtime which can be split into two breaks. A 45-minute rest break must be given if an employee works for more than nine hours, and this can be split into breaks of at least 15 minutes.
At the end of the working day, there must be an uninterrupted rest period of at least 11 hours. In addition, most industries have collective agreements that regulate working hours and holidays. Therefore, some companies may operate a longer working week, but compensate their employees with a higher salary or additional annual holiday leave.
Work on Sundays and public holidays is generally prohibited. There can be exceptions, for example in the service industry. However, work on Sundays must be compensated by corresponding time off within the following two weeks (or eight weeks in the case of work on public holidays).
Overtime in Germany
Overtime pays and surcharges are not regulated by law but are subject to the employment contract, collective bargaining or works council agreements. Overtime must also conform to the maximum working hours (i.e., no more than 60 hours a week, averaging 48 hours over a six-month period).
Overtime is usually compensated with time off in lieu, although some companies only pay for any overtime hours worked. The right to compensation for overtime hours worked will be specified in the employment contract. Some companies maintain that a small amount of overtime is a normal part of the job and will not provide additional remuneration.
Notice period in Germany
Over the decades, Germany has developed a strong social contract with workers. There are many laws and regulations that employers must follow to ensure the wellbeing and fair and equal treatment of employees.
The length of the notice period given by the employer depends on the employee’s length of service, ranging from four weeks for employees with less than two years’ service, to seven months for employees with more than 20 years’ service.
Unless otherwise stated in the employment contract, the extended statutory notice periods are only applicable to terminations by the employer, whereas the employee may terminate the employment with a notice period of four weeks to the 15th or the end of a calendar month.
The minimum notice period given to employees, with length of service:
- Up to 2 years – four weeks prior to either the 15th or the last day of the next month
- 2 to 4 years – one month prior to the last day of the next month
- 5 to 7 years – two months prior to the last day of the next month
- 8 to 9 years – three months prior to the last day of the next month
- 10 to 11 years – four months prior to the last day of the next month
- 12 to 14 years – five months prior to the last day of the next month
- 15 to 19 years – six months prior to the last day of the next month
- 20 years or longer – seven months prior to the last day of the next month
Most employment contracts align the notice periods for employees with the extended periods applicable to employers. Collective agreements may specify longer or shorter notice periods, whereas individual contracts of employment may only specify longer notice periods.
Dismissals must be declared clearly and unambiguously. The decision to end an employment relationship, and when it should end, must therefore be stated with absolute clarity in the dismissal notice. Any notice of termination, whether issued by the employer or by the employee, must be made in writing or the notice of termination is invalid.