Legal innovations in labor law 2025

Since January 1, 2025, there have been a number of changes to employment law. In particular, the Bureaucracy Relief Act (Bürokratieentlastungsgesetz) will provide many simplifications and enable HR departments to digitize processes. However, employers should also keep an eye out now for changes that will only come into force in subsequent years, such as the Pay Transparency Directive.

The minimum wage is rising

Since January 1, 2025, the minimum wage has been 12.82 euros gross. The earnings threshold for mini-jobbers has been increased to 556 euros gross.

The Bureaucracy Relief Act facilitates digitization

The Fourth Bureaucracy Relief Act came into force on January 1, 2025. This amended various formal requirements in employment law. In some places, the strict written form was replaced by the text form.

Employment contracts

In principle, no form is required for employment contracts. They can also be concluded verbally or even implied. However, under the Evidence Act, employers previously had to set out the essential terms of the contract in writing, sign them and hand them over to the employee in the original. Companies have therefore not been able to fully digitize the process of concluding employment contracts. This has been possible since January 2025, as text form is now sufficient to prove the essential terms of the contract. Employers can now conclude employment contracts completely electronically. However, if the employment relationship is for a fixed term, a written contract is still required. Only the automatic termination of the employment relationship upon reaching the standard retirement age has also been permitted in text form since this year in accordance with Section 41 (2) sentence 1 SGB VI.

Employment references

The Fourth Bureaucracy Relief Act also amended the Trade Regulation Act. Certificates of employment previously had to be issued in writing. Since January 1, 2025, text form has also been sufficient for this purpose in accordance with Section 109 (3) GewO if the employee consents.

Temporary employment

Contracts between lenders and hirers previously had to be concluded in writing in accordance with Section 12 (1) AÜG old version. Since January 1, 2025, text form has also been sufficient here.

Application for parental leave

From May 1, 2025, employees will be able to apply for parental leave in text form (Section 16 (1) BEEG new version). If the employer wishes to reject the application, it may also do so in text form from this date.

Display obligations

Employers no longer have to display certain information on paper, but can also use electronic means. For example, copies of the Working Hours Act, the Youth Employment Protection Act, collective agreements and company agreements on working hours no longer have to be displayed, but can be made available via a standard company channel, such as the intranet.

Risk assessments in accordance with the Maternity Protection Act

In accordance with Section 10 (1) MuSchG, the employer must carry out a risk assessment for pregnant and breastfeeding employees. Since January 1, 2025, this obligation does not apply if a pregnant or breastfeeding woman is not allowed to carry out the activity or be exposed to a working condition in accordance with a rule or finding of the Maternity Protection Committee published for this purpose pursuant to Section 30 (4) MuSchG.

Current status of working time law

In its “time clock ruling” back in 2019, the ECJ ordered national legislators to oblige employers to introduce time recording systems. The German Working Hours Act currently only stipulates that working hours in excess of the standard working hours must be recorded. However, in September 2022, the Federal Labor Court ruled that employers are already obliged to record all of their employees’ working hours in line with the interpretation of Section 3 (2) of the German Working Hours Act (ArbSchG). Agreement on a new law on recording working hours has not been reached in the current legislative period. It is not possible to predict when and how the next government will implement the EU requirements on working time recording. According to its election manifesto, the CDU/CSU wants to make working time legislation more flexible and replace the maximum daily working time with a maximum weekly working time. The draft election manifestos of the SPD and the Greens also advocate more flexible working hours and working time models.

The Pay Transparency Directive should ensure equal pay

The Pay Transparency Directive came into force in June 2023. It must be transposed into national law by June 2026. There is still no draft for a German implementation law. Nevertheless, employers can and should already start analyzing their remuneration systems and eliminating any pay differences. Among other things, the EU directive stipulates that

• salary levels or salary scales must be disclosed in job advertisements or before job interviews,
• Applicants may not be asked about salary development,
• Employees can request information about their individual salary and the average salary for comparable jobs, broken down by gender,
• employers must regularly report on the gender pay gap and
• Employers with a gender pay gap of 5 percent or more must carry out a joint assessment with employee representatives.

Financial penalties are to be imposed in the event of non-compliance.

EU directive on platform work aims to improve working conditions

The EU directive on platform work came into force on December 1, 2024. The member states must implement it by December 2, 2026. The aim of the directive is to ensure decent working conditions for digital platform workers. Among other things, it aims to prevent platform workers from ending up in bogus self-employment. If employees are bound by instructions, an employment relationship should be assumed. In addition, digital platforms should ensure greater data protection and more transparency regarding the algorithms used to distribute jobs.

You can read about legal changes in other areas of the law in our Klardenker article.