Secondment contract
Legal information on drafting employment contracts for postings to Germany.
Here you learn ...
the design of secondment contracts in Germany
Difference between the one-contract and the two-contract model
What the Federal Employment Agency checks when posting workers
important clauses for secondment contracts when posting
Table of Content
1. Employment contract for secondments
2. Secondment contract
3. Secondment contract template
4. Secondment agreement
5. Conclusion Wording of the secondment contract
1. Employment contract for secondments
The correct drafting of employment contracts and secondment agreements is a key element of a successful secondment to Germany. An employment contract for a secondment to Germany must take into account both German and foreign labor law regulations. Crucial considerations include provisions regarding remuneration, working hours, social security, and tax liability .
The particular importance of a lawful secondment agreement arises primarily from the fact that the Federal Employment Agency will only approve the assignment if all relevant regulations are complied with. If in doubt, legal advice should be sought to review employment contracts for a secondment to Germany and, if necessary, adapt them.
2. Secondment contract
When assigning an employee to Germany, the first decision must be made whether the assignment should be conducted under a single-contract or a dual-contract model . With the single-contract model, the foreign employee retains their original employment contract with the foreign branch. With the multiple-contract model, the domestic employment contract remains in effect, but is suspended during the assignment. In addition, a secondment agreement is concluded for the duration of the assignment.
3. Secondment contract template
Depending on the chosen secondment agreement model, different wording and clauses are relevant. Both models have different employment law and tax consequences. In practice, the following clauses in the secondment agreement are particularly relevant:
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concrete design of the posting (in particular determination of the place of work)
Limitation of the contract for the duration of the posting
Commencement of the employment contract subject to the condition precedent of presentation of a valid residence permit
Clause for the recognition of length of service
The employee’s obligation to use up the leave by the end of the posting,
any additional services related to the assignment (e.g. accommodation for the duration of the assignment),
if the contract is drawn up in several languages, a clause stating that the German version of the contract takes precedence over other language versions,
if applicable, regulations on social security and taxes (e.g. tax equalization)
In practice, the relevant clauses must be part of the employment contract in order to successfully complete the assignment to Germany. Therefore, the Federal Employment Agency requires either the inclusion of relevant clauses or the submission of a separate assignment agreement (see the relevant section in Supplementary Sheet B (Assignments) to the Declaration of Employment Relationship ).
4. Secondment agreement
If the original employment contract is not amended during a posting to Germany, a separate posting agreement must be concluded. A posting agreement is a key component of the posting of employees to Germany. It regulates the rights and obligations between the posting company, the employee, and, if applicable, the receiving company. For a legally sound arrangement, expert advice from a labor migration law expert is essential. This ensures compliance with the posting and avoids problems with the Federal Employment Agency and customs authorities.
If you have any questions about the wording of a secondment contract or a secondment agreement, one of our VISAGUARD lawyers will be happy to advise you .
Summary of this Page
A legally compliant secondment agreement is essential when sending employees to Germany. Companies must decide whether to choose a single-contract or two-contract model and comply with labor law and tax regulations. Clear regulations regarding the place of work, fixed-term employment, residence permits, social security contributions, and tax liability are particularly important. The Federal Employment Agency verifies compliance with these regulations during the process. Legal advice ensures a compliant secondment and minimizes risks with authorities such as customs. Companies should therefore carefully draft their contracts to ensure a smooth secondment.
