Employment Law 2023: What Employers Should Know

Employment laws
Liz is Head of Legal at twinwin.
As an expert in employment law, Liz enjoys sharing valuable legal knowledge with HR professionals, enabling them to avoid costly legal mistakes. Her mission at twinwin is to make employment law easy for HR.

There were numerous changes in employment law in 2023, which are of central importance for employers. This article provides a concise overview of the most important labor laws 2023 and latest HR regulations and their implications for corporate management and personnel planning.


An overview of the most important labor laws of 2023

There were also changes in employment law in 2023 that are important for company management and HR compliance. These labor laws are not fully effective in 2023 and some will not take effect until 2024. But HR professionals should know them all.

Here are the key provisions of the 2023 Labor Law Amendments:

Electronic certificate of incapacity for work (eAU):

Since January 1, 2023, the paper-based certificate of incapacity for work has been replaced by an electronic version. Doctors digitally transmit the certificates directly to the statutory health insurance companies and employers must retrieve them digitally.

Encrypted data transmission brings technical requirements such as approved software (such as a corresponding payroll program). In addition, the data can only be retrieved if the employee has previously had their incapacity for work (AU) and its expected duration determined by a doctor (obligation to determine in accordance with section 5 (1a) Continued Renumeration Act (EFZG)). The employee must have the incapacity to work and its expected duration determined by a doctor no later than the fourth day of illness. The employer can also request the medical diagnosis earlier. A distinction must be made between this and the notification requirement in accordance with section 5 (1) EFZG: The employee is obliged to immediately inform the employer of the incapacity to work and its expected duration. In practice, this means that employers cannot send blanket inquiries to the health insurance company for all employees at once.

There are a few exceptions. The EAU process does not apply for employees with private health insurance, for certain groups such as mini-jobbers in private households, or when private practices at home or abroad are found to be unable to work.

Employers are now also asking health insurance companies about the issue of pre-existing conditions, which is important for continued payment of pay, electronically, via the Data exchange compensation payments (DTA EEL).

According to the AOK specialist portal for employers however, a previous illness request is only admissible if:

  • Evidence of current incapacity for work is available.
  • There was at least one pre-existing condition in the six months before the current one.
  • The cumulative AU periods of the last twelve months (including the current one) result in at least 30 days.

Even though the eAU has been mandatory for almost a year now, there are still some challenges in its practical implementation. This includes, for example, the elimination of the originally planned automatic transmission of proof to the employer in the event of illness beyond the continued payment period. The AOK specialist portal linked above provides a helpful overview of such questions. You can find out more about AU in our article sick report after dismissal: what now?

BEA process

The BEA procedure (“accept certificates electronically”), with which companies digitally submit certificates to the federal employment agency, has been established at companies of all sizes since 2014. But since January 1, 2023, there have also been two changes here that HR professionals should not overlook:

1. The electronic transmission of certificates to the employment agency via the BEA process is no longer voluntary but mandatory. This applies to all employment relationships and all employers without exception.

The following certificates are affected:

· Work certificate in accordance with section 312 Social Code Third Book (SGB III)

· Work certificate for purposes of international and international law in accordance with Section 312a SGB III (EU work certificate)

· Additional income certificate in accordance with Section 313 SGB III

2. Workers' right to object to electronic data transmission has been abolished as of 2023. Companies no longer have to inform employees for whom a work certificate is issued about the electronic transmission of data.

Whistleblower Protection Act:

The latest HR regulations include the whistleblower protection act, which is intended to protect people (often called whistleblowers) who uncover information about grievances or illegal acts in organizations from retaliation. It came into force on July 2, 2023 and is one of the labor laws of 2023, which entail extensive changes for employers.

Fro, companies with 250 employees or more were required to set up a whistleblower system. For companies with 50 employees or more, the transition period expired on December 17, 2023. As a result, all employers (including public ones) with 50 or more employees are now required to operate an internal whistleblower system to protect whistleblowers.

What you shouldn't overread: The HinSchG applies to companies in selected industries, such as investment service providers and certain insurance companies (such as pension funds) regardless of the number of employees, i.e. from just one employee! The list of affected sectors can be found in Section 12 (3) HinSchG.

The reprisals sanctioned by the Act include:

  1. Termination, warning
  2. Refusal of promotion
  3. Changes in the distribution of tasks and other disciplinary measures
  4. Discrimination, reputation damage, bullying

The most important regulations of the HinSchG include Federal Ministry of Justice (BFJ):

  • Scope of application: First of all, the law concerns all persons who obtain information about violations in the context of their professional activities. These can therefore also be suppliers, shareholders or contracted self-employed persons.

The subject matter may be all violations subject to criminal and fines if they concern regulations which serve to protect the life, limb, health or rights of employees.

In addition, the HinSchG applies to all legislation implementing certain EU regulations and directly applicable EU acts, such as combating money laundering, requirements for the transport of dangerous goods or food safety provisions.

  • Reporting channels: A whistleblower can submit a report in writing, orally or in person. It is also important to know that whistleblowers can also immediately contact external reporting agencies, such as the Bfj (Federal Office of Justice) or the Federal Financial Supervisory Authority (BaFin).
  • Confidentiality requirement: The identity of the whistleblowers and the persons mentioned in the reports must be protected and may only be released in exceptional cases.
  • Personnel responsibility: Reporting office officers must be appointed to receive and process the reports. These people should be able to act independently and have the necessary expertise.
  • Processing deadlines: Within seven days of receipt of a report, confirmation must be sent to the whistleblower and, within three months, information on follow-up measures taken (such as an internal company investigation or the involvement of a competent authority, according to the law) must be provided.
  • Possible sanctions: Loud Information from the Stuttgart Chamber of Industry and Commerce Violations of the HinSchG are treated as administrative offenses subject to fines, the following details apply:

o Up to 50 Euro for preventing a report, taking reprisal (or trying to do so) or recklessly disregarding the confidentiality requirement (10,000 euros in case of negligent disregard). This applies to those responsible in the company.

o For the company itself, the fine can increase tenfold and thus amount to up to 500,000 euros.

o 20,000 euros if the company does not comply with the establishment of an internal reporting office.

Tip: On this topic, also read our Interview with Dr. Thomas Altenbach, CEO of LegalTegrity.

Statute of limitations for vacation entitlements:

There have also been important updates to vacation law. Decisions of both the European Court of Justice of September 22, 2022 and the Federal Labour Court (BAG) of December 20, 2022 have an impact on the statute of limitations for vacation entitlements.

Accordingly, unused vacation days taken by employees do not expire as long as the company has not notified the respective employees of the (remaining) vacation entitlement. In other words, the statute of limitations of three years for vacation claims, which has been known for a long time under the German Civil Code, only begins when the employer in each individual case has pointed this out to the employee.

Incidentally, the same applies to the question of whether vacation is forfeited in connection with a long-term illness. According to the Federal Labour Court, vacation from the year in which an employee worked before becoming ill will only expire if the employer has pointed this out.

But: The worst fears that many employers had following the announcement of the BAG ruling, namely that even former employees could now assert compensation claims for unused vacation even from the previous period, did not occur. Our blog post explains more Vacation planning in the company: What happens with remaining vacation?

These updates in vacation law are of great importance for employers and employees and should be considered to ensure HR compliance in 2023 as well.


Working time recording

There was also an important change in 2023 with regard to recording working time. In fact, the Federal Labour Court has clarified that employers are required to record and document the working hours of their employees systematically and electronically.

The decision is based on the so-called “time clock ruling” of the European Court of Justice of May 14, 2019, which requires that all working hours must be fully and systematically documented, including start and end times as well as breaks (ECJ case 55/18 CCOO).

A new draft by the Federal Ministry of Labour and Social Affairs (BMAS) revising the Working Hours Act (ArbZG) provides exactly how working hours should be recorded. This draft includes both the Working Hours Act and the Youth Employment Protection Act.

It is expected that time recording must be done electronically and on the same working day, documenting the start, end and duration of working hours. The employer does not have to record working hours himself, but can delegate this to the employee or even to third parties, for example to the respective supervisor.

The draft law provides for exceptions to electronic time recording. Smaller companies with up to 10 employees could be exempted from this, for example. It is also possible that collective bargaining parties can agree on another form of time recording, for example in paper form.

There is currently no fixed timetable for the adoption of a corresponding law. After all, the BMAS has a FAQ about recording working hours published on his website.


Employment law changes in 2023

Further employment law changes 2023 in brief

Here are further changes in employment law 2023 in key words:

1.  Company number: Since 2023, all members of professional associations and accident insurance funds in Germany have had a unique 15-digit company number for simplified communication that replaced the old numbers and was automatically switched over.

2nd  Minimum training allowance: From 2023, the minimum training allowance for trainees who are not subject to collective agreements will increase. A further adjustment per training year will take place on January 1, 2024. You can this DIHK table remove.

3rd  Electronically supported tax audit: Since January 2023, the electronic transmission of payroll data to pension insurance in Germany has been mandatory, with a possible exemption until 2026 and the use of an audited billing program. This regulation is part of electronically supported tax audit (EuBP), which provides for the transfer of billing data to the pension insurance company before the tax audit.

4th  Construction travel time allowance: Since the beginning of 2023, employers in the construction industry have had to pay their employees for trips to the construction site. Die Details of this travel time allowance depend on various factors.

5th  Short-time work: As of July 1, 2023, the pandemic-related Special scheme for simplified access to short-time work allowance omitted. By the end of July 2023, employers were able to pay a lump sum of half of the social security contributions for lost working time due to Continuing vocational training during short-time work Get reimbursed.

6th  Repayment clauses for recruitment costs: A clause that requires employees to reimburse recruitment costs in the event of early termination is ineffective. that Federal Labor Court ruled with judgment of 20.06.2023that this unduly affects the employee's right to freely choose their place of work.

7.  Chairman of the works council and data protection officer: A person may not hold both functions at the same time, as this may involve conflicts of interest (BAG, judgment of 06.06.2023, file no. 9 AZR 383/19)

8th  Video surveillance as evidence: Recordings from open video surveillance may be used as evidence in court (no fundamental prohibition of exploitation), even if the monitoring was not fully compliant with data protection regulations (BAG, judgment of 29.06.2023, file number 2 AZR 296/22).

9th  Temporary work and the principle of equal pay: A lower salary for temporary workers may be set by collective agreement, provided that compensatory benefits are granted which make it possible to neutralize the unequal treatment. A deviation from the principle of equal pay is therefore possible (BAG, judgment of 31.05.2023, file no. 5 AZR 143/19).

10th Part-time company pension: The reduction of the company pension for parttime employment is permitted and does not constitute discrimination provided that it serves the purpose of maintaining the last standard of living achieved in working life. BAG, judgment of 20.06.2023, file number 3 AZR 221/22.

11th  Dispatch of drivers: On June 28, 2023, the Act on the regulation of the posting of drivers in the road transport sector and on the cross-border enforcement of the right of posting proclaims. It clarifies that the posting law (see the Workers Posting Act — AEntG) generally also applies to road traffic.

12th  Participation in cross-border transformations: By the one adopted in January 2023 Act on employee participation in the event of a cross-border change of legal form and cross-border division (MgFSG) Does the legislator want to prevent participation rights from being affected by transformation projects (for example the transfer of the company headquarters to another country) (“escape from participation”).

13th Telephone sick leave: Since December 2023, patients known to the doctor with mild symptoms have been able to receive a sick note by telephone for up to five days. This regulation is now permanent.

And finally, this treat:

14th  Sixth Education and Training Services Working Conditions Ordinance: If you thought so far that the longest German word was Danube Steam Shipping Company Captain, you do not yet know the Weiterbildungsdienstarbeitsbedingungenverordnung. Details can be found here: BMAS - Sixth Training and Continuing Education Services Working Conditions Ordinance


Labour law changes in 2023 at EU level

The EU and its Member States attach increasing importance to improved working conditions, work-life balance and the protection of certain groups of workers. Companies operating in the EU must adapt to these changes and adapt their processes accordingly.

In addition to the EU Directive for transparent and predictable working conditions of 2019, which was implemented in Germany in July 2022 and in particular expanded the requirements of the Evidence Act, another labor legislation 2023 plays an important role:

Directive (EU) 2023/970 of 10 May 2023 strengthening the application of the principle of equal pay for equal or equal work between men and women through pay transparency and enforcement mechanisms (”EU Wage Transparency Directive“)

The Directive aims to take measures to eliminate the gender pay gap. This includes extensive rights to information on payments paid for (future) employees as well as the obligation for employers to take countermeasures.

The EU regulations, some of which go significantly beyond the current Pay Transparency Act, must be implemented into national law by the member states within three years.


Outlook for 2024

2024 will also bring numerous changes in employment law. Here is a small foretaste:

  • social security contributions: from January 1, 2024, the contribution limits for health, long-term care, pension and unemployment insurance will change again.
  • Compensatory tax for vacant compulsory jobs of severely disabled people: in Germany, companies with more than 20 employees must fill at least 5% of their jobs with severely disabled employees. If the quota is missed, there is a staggered compensatory fee of up to 360 euros per month and vacant space. New from 2024: If no severely disabled employee is employed, there is now an increased compensatory tax of 720 euros per month for every vacant compulsory position. That is more than twice as much as before.
  • Child sickness benefit: with effect from January 2024, the changes to children's sickness benefit will be introduced and the days of entitlement to child sickness benefit for home care will be increased. According to this, parents can receive 15 working days per child instead of 10 working days per child in 2024 and 2025, single parents 30 working days instead of the previous 20.
  •  Parental leave and parental allowance: from 2024, employers must report the start and end of parental leave to the statutory health insurance companies. In addition, a parental allowance reform is planned, which gradually reduces the income limit above which there is no entitlement to 175,000 euros. Even in this case, the law has not yet been passed.
  • minimum wage: from January 2024, the minimum wage will rise from 12.00 to 12.41 euros, from 2025 to 12.82 euros gross per hour. In addition, the Eighth Minimum Wage Ordinance in the scaffolding trade was adopted on December 1, 2023. From this date, there is a minimum hourly wage of 13.60 euros gross, which rises to 13.95 euros gross from October 1, 2024.

That's it ! Our overview of employment law changes that were relevant for HR in 2023 and beyond. However, without any claim to completeness. If you need more detailed information and need reliable and pragmatic solutions for your day-to-day HR work, twinwin's employment law modules and legally compliant templates are ideal. That is well-founded expertise at a fixed price.