Search
Contact
12.05.2023 | KPMG Law Insights

Bundestag and Bundesrat pass whistleblower protection law

The Whistleblower Protection Act has been passed. On May 9, 2023, the Mediation Committee of the Bundestag and Bundesrat reached an agreement and submitted a recommended resolution on the draft bill. The Bundestag approved this on May 11, 2023, the Federal Council then immediately on May 12, 2023 approved. The law will thus enter into force one month after promulgation, i.e. probably in mid-June 2023.

The Whistleblower Protection Act is intended to implement the so-called Whistleblower Directive of the EU (2019/1937). The deadline for this had already expired on December 17, 2021. Although the Bundestag had already passed the law on February 10, 2023, the Bundesrat (upper house of the German parliament) refused to give its approval at the time, which is why a mediation committee was set up.

The purpose of the regulation is to improve the enforcement of European and German law by strengthening the protection of employees who draw attention to wrongdoing in their organization or in their authority.

Here are the key points of the new law:

Scope of application of the Whistleblower Protection Act

The new whistleblower protection rules apply to private and public employment employers with 50 or more employees. Private employment employers with typically 50 to 249 employees will still be given a grace period for implementation and will not be required to have their internal reporting offices in place as early as mid-June 2023, but rather as late as December 17, 2023. Employees, civil servants, self-employed persons, partners, interns, volunteers, employees of suppliers and persons whose employment relationship has already ended or has not yet begun or is in a pre-contractual stage fall under the legal protection as whistleblowers.

The Act does not apply to the reporting of all wrongdoing, but only to criminal offenses and certain misdemeanors as well as other violations of law that are listed in the catalog of Section 1 of the Whistleblower Protection Act. A further prerequisite is that these legal provisions are violated in the course of a professional, business or official activity.

Obligation to establish a reporting office

Employers with at least 50 employees each, as a rule, are required to set up an internal reporting office for tips. Internal reporting channels must allow reports in verbal or text form. Personal meetings with a person from the internal reporting office must also be made possible.

Hotlines are not required to accept anonymous reports. This was originally provided for in the legislation; however, this passage was deleted in the Mediation Committee.

The reporting offices check the validity of the indications and initiate appropriate follow-up measures. These are usually internal investigations, either by the employment provider itself or by another competent body.

Whistleblowers are not bound to the internal reporting office; they can also contact an external reporting office directly in accordance with the Whistleblower Protection Act.

Whistleblowers must not be disadvantaged

If someone has made a tip and is discriminated against in connection with his or her professional activities, the law presumes that this is a reprisal because of the tip. The employer bears the burden of proving that the adverse action is justified for other reasons. However, the person giving notice must make a substantiated claim that the adverse action is a reprisal. If reprisals actually occur, the whistleblower can claim damages, for example.

Fines for whistleblowers and for employment employers

Both the whistleblower and the company may be subject to fines. A person who knowingly spreads false facts is as much in violation of the law as a person who obstructs communication. Fines may also be imposed if the hotline is not established, reprisals are taken against whistleblowers, or confidentiality is not maintained. The amount of the fine can be up to 50,000 euros and, if necessary, can be increased up to ten times this amount with respect to companies.

Conclusion

Germany is one of the last EU countries to finally have a whistleblower protection law – the KPMG Law Whitepaper provides a general overview. That it was coming has long been known, and many employers have already voluntarily set up a whistleblower hotline. As an employer, you should be informed about legal violations in the company as early as possible. It is to be welcomed that there is now clarity and that the procedures can be designed. Of course, employment providers are free to create additional options for reporting beyond the minimum legal requirements. For example, the relationship to the “complaints mechanism” under the Supply Chain Act, which is to be designed in a very similar way in parts, needs to be clarified.

All private and public employment providers should establish and publicize an internal reporting office and appropriate reporting channels as soon as possible.

Explore #more

05.03.2025 | In the media

KPMG Law Statement in TextilWirtschaft: What the changes from Brussels mean for the fashion industry

It’s now official: the EU Commission will massively simplify the planned sustainability reporting. The Supply Chain Law Initiative examines the announced changes to the CSDDD…

28.02.2025 | In the media

KPMG LLP Launches KPMG Law US – The First Big Four Law Firm Serving The US Market

The Supreme Court of the US state of Arizona has granted KPMG US the license for KPMG Law US. As of February 27, 2025, KPMG…

27.02.2025 | In the media

KPMG Law Statement in the ESGZ: The current opinion

Is the German Supply Chain Act sufficient to hold companies accountable, or do we need stricter liability rules for human rights and environmental violations? KPMG…

26.02.2025 | KPMG Law Insights

First Omnibus Package to relax the obligations of the CSDDD, CSRD and EU taxonomy

The EU Commission has today published the draft of the first announced Omnibus Package. With the first directive as part of the omnibus initiative,…

24.02.2025 |

Digitization of administration – the digital driver’s license is a first step

The introduction of digital driver’s licenses and vehicle documents recently approved by the Federal Cabinet marks a significant milestone in the digitalization of modern administration.…

21.02.2025 | In the media

Guest article in Betriebs Berater: Overview of regulation for securities institutions

Since the Securities Institutions Act (WpIG) came into force on June 26, 2021, securities institutions have had their own supervisory regime. In addition to the…

21.02.2025 | KPMG Law Insights

Money laundering prevention: BaFin calls on financial sector to act

The German Federal Financial Supervisory Authority (BaFin) is calling on the financial sector to pay greater attention to money laundering prevention. In its report “Risks…

18.02.2025 | KPMG Law Insights

AI compliance: important legal aspects at a glance

Human intelligence draws on experience, emotion and intuition. Artificial intelligence (AI), on the other hand, processes vast amounts of data in fractions of a second.…

17.02.2025 | In the media

WirtschaftsWoche honors KPMG Law and Konstantin von Busekist

KPMG Law and Konstantin von Busekist were recognized as TOP Law Firm 2025 and Konstantin von Busekist as TOP Lawyer 2025 in the current WirtschaftsWoche…

17.02.2025 | In the media

Guest article in InfrastrukturRecht: Inability to charge the water concession levy

On 09.10.2024 (9 B 5.24), the BVerwG dismissed the appeal of the City of Kassel against the non-admission of the appeal in the judgment of…

Contact

Dr. Bernd Federmann, LL.M.

Partner
Stuttgart Site Manager
Head of Compliance & Corporate Criminal Law

Theodor-Heuss-Straße 5
70174 Stuttgart

Tel.: 0711 781923418
bfedermann@kpmg-law.com

© 2024 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a public limited company under German law and a member of the global KPMG organisation of independent member firms affiliated with KPMG International Limited, a Private English Company Limited by Guarantee. All rights reserved. For more details on the structure of KPMG’s global organisation, please visit https://home.kpmg/governance.

 KPMG International does not provide services to clients. No member firm is authorised to bind or contract KPMG International or any other member firm to any third party, just as KPMG International is not authorised to bind or contract any other member firm.

Scroll