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IMPACT – MEDIUM
What is the change? Germany will soon begin requesting more detailed information from companies about the salaries they pay foreign workers during the work authorization extension process.
What does the change mean? Beginning Jan. 1, companies seeking to extend work authorization for non-EU/EEA nationals will be required to provide information showing they are not behind on tax or social security payments and that they have not had any recent bankruptcies and are not in danger of falling into bankruptcy. They will also be required to provide detailed information about employee salaries, including whether foreign employees are paid at least as much as their German counterparts. Officials began requesting this information for first-time work authorization requests earlier this year and will now extend the requirements to extension applications as well.
Additional information: Earlier this year, Germany’s Federal Employment Agency updated its application forms for pre-work approval for first-time applicants, requiring employers to provide more detailed information, including information about their company’s tax, social security and bankruptcy history. The new forms also require companies to provide detailed salary information including (1) the employee’s monthly salary based on an employment contract or collective bargaining agreement, (2) salaries of German employees with comparable positions and (3) the number of paid holidays an employee will be offered. The new forms will be required for work authorization extension applications, as well as first-time applications (as previously required), beginning Jan. 1.
Analysis & Comments: Employers should take note of the change and leave extra time to gather the required information when seeking to extend work authorization for a non-EU/EEA employee and possibly add this information to existing contract and assignment letter templates. Employers may also wish to review their salary levels to make sure they are in compliance with the requirements, including the requirement that foreign workers be paid at least as much as their German counterparts.
Source: Deloitte LLP. Deloitte LLP is a limited liability partnership registered in England and Wales with registered number OC303675 and its registered office at 1 New Street Square, London EC4A 3HQ, United Kingdom.
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