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Guide for SMEs on human resource compliance in labour migration law

HERE YOU LEARN ...

... what obligations you have as an entrepreneur when employing foreigners

... how to avoid breaches of duty under immigration law as an entrepreneur (compliance)

... what consequences may arise if labour migration law is violated

... how to apply for and extend a work permit from the Federal Employment Agency

... when a work permit can be revoked

Written by: 

Attorney

Publication date:

27.06.2024

Reading time

12 mins

Table of Content

1. Employer’s obligations when employing foreign nationals

1.1 Compliance measures against illegal employment

1.2 Consequences of illegal employment

1.2.1 Possible penalties for employers

1.2.2 Possible penalties for employees


2. Work permit for foreigners

2.1 Work permit as a condition of the residence permit

2.2 Which foreigners do not need a work permit?

2.2.1 Work permit for EU citizens

2.2.2 Work permit in the case of non-employment fictions


3. Renewal of work permit


4. Apply for a work permit from the Federal Employment Agency

4.1 Preliminary approval of the Federal Agency

4.2 When does the Federal Employment Agency grant approval for employment?

4.2.1 No discrimination against foreigners

4.2.2 Legality of the employment contract

4.2.3 Further requirements

4.3 Statement on employment relationship

4.4 Priority check


5. Revocation of work permit

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1. Employer’s obligations when employing foreign nationals
1.1 Compliance measures against illegal employment

In Germany, special labor and residence laws apply to the employment of foreigners. These laws impose special obligations on both employers and employees. If the employer or employee fails to comply with these obligations, this constitutes illegal employment of foreigners. This can constitute both an administrative offence and a criminal offence . In serious cases or in cases of repeated offenses, the migration administration can also completely prohibit the employment of foreigners for an employer and impose entry bans on the employee.

To avoid this, the employer has the following obligations :


  • Checking the work permit when hiring an employee (Section 4a, Paragraph 5, Sentence 3, No. 1 of the Residence Act, Section 404, Paragraph 1, No. 1 of the Social Code, Book III),

  • Take a copy of the work permit and passport for the employee file (Section 4a, Paragraph 5, Sentence 3, No. 2 of the Residence Act),

  • Noting deadlines for the expiry of work permits and applying for the extension of a work permit in good time (Section 81 Paragraph 4 of the Residence Act),

  • Issuing employer certificates so that the foreigner can fulfil his obligation to cooperate with the immigration authorities (Section 82 Paragraph 1 of the Residence Act),

  • no commissioning of subcontractors who violate the right of residence (Section 4a, Paragraph 5, Sentence 1 of the Residence Act),

  • report to the immigration authorities if the employment relationship of a foreigner has been terminated (Section 4a Paragraph 5 Sentence 3 No. 3 Residence Act).

1.2 Consequences of illegal employment

Violations of these obligations may result in the following penalties:


1.2.1 Possible penalties for employers illegal employment


  • Fine of up to 500,000 euros (Section 404, Paragraph 3 of the Social Code Book IV),

  • general ban on the employment of foreigners (§§ 98 para. 2a no. 1, 40 para. 3 AufenthG),

  • In serious cases of repeated offenses, imprisonment of up to one year (Section 11 Paragraph 1 No. 2 SchwarzArbG).

1.2.2 Possible penalties for illegal employment


  • Fine of up to 5,000 euros (Section 98, paragraph 5 of the Residence Act),

  • Revocation of a residence permit and expulsion (Section 53 of the Residence Act, Section 51, Paragraph 1, No. 4 of the Residence Act),

  • Issuing a ban on residence permits (Section 5 Paragraph 1 No. 2 Residence Act),

  • Entry ban (Section 11 paragraph 1 Residence Act).


It should be noted, however, that the consequences listed usually only occur in serious cases. In most cases, however, employers and employees do not act intentionally; rather, illegal employment occurs due to formal errors (so-called organizational negligence ). In these cases, too, high fines can be threatened, but with legal support, the worst-case scenarios (employment ban for the employer and deportation of the employee) can usually be avoided. The threatened fine can also usually be reduced to an "acceptable" level through good communication with the authorities. If you are accused of illegally employing foreigners, it is therefore helpful to seek the advice of a lawyer.

2. Work permit for foreigners

2.1 Work permit as a condition of the residence permit

Illegal or even criminal conduct can be avoided if the human resources department staff know what to look out for and the team members are trained accordingly (e.g. through in-house training).


The basic principle of employing foreigners is relatively easy to understand: According to Section 4a Paragraph 3 Sentence 1 of the Residence Act , every residence permit must indicate whether working is permitted and whether the exercise of employment is subject to restrictions. In addition, restrictions imposed by the Federal Employment Agency on the exercise of employment must be included in the residence permit. In other words: every residence permit indicates whether and to what extent a foreigner is permitted to work . The relevant provision can be entered either under “additional provisions” or on the so-called “additional sheet”.


In order for the foreigner to be allowed to work in your company, one of the following additional conditions must be entered in the places marked in red in the picture:


"Take up gainful employment"

The foreigner can do any kind of work or be self-employed. The foreigner can therefore be employed in any position in the company without any problems. This is usually the case with family reunification and the employment of nationals from the “Best Friends States” (especially the USA and UK). The State Office for Immigration (LEA) in Berlin also issues Blue Cards, usually with the additional condition “gainful employment permitted”.


“Employment as ... at ... allowed”

The foreigner may only work in the position specified in the additional provision at the company specified in the additional provision (so-called employer commitment). Activities other than those specified in the additional provision may not be carried out. This also applies in the case of a promotion and changes in the company form, which is why the work permit must also be renewed in these cases. Employment with employer commitment is also relevant in the case of a change of employer or when hiring new employees, since the residence permits of new employees are usually still tied to the old employer. In this case, too, a new work permit must be applied for. Most skilled worker titles (in particular Section 18b Paragraph 1 of the Residence Act and the EU Blue Card) are issued with the additional provision “employment permitted”.


“Self-employment allowed”

This additional provision only allows self-employment (e.g. for freelancers and entrepreneurs). Employment of foreigners with this additional provision is not permitted. Although employment as a freelancer (i.e. on the employee's account) is possible, the risk of bogus self-employment should always be taken into account.


“Employment not permitted”

The foreigner may not be employed with this additional condition. Many training titles (e.g. §§ 16a, 16b AufenthG) have this additional condition.

2.2 Which employees do not need a work permit?

2.2.1 Work permit for EU citizens

However, not all foreigners can produce a work permit, as not all foreigners require a work permit . This is especially true for EU citizens. European citizens do not require a work permit due to European freedom of movement, as the Residence Act does not apply to EU citizens at all (Section 1 Paragraph 2 No. 1 of the Residence Act). European citizens do not receive a permit either (even if they explicitly apply for a work permit). The State Office for Immigration (LEA) in Berlin issued “declaratory” residence cards to EU citizens until recently, but this practice has since been discontinued. For European citizens, it is therefore sufficient to have a copy of the passport on file as proof of a work permit.


2.2.2 Work permit in the case of non-employment fictions

A work permit is also not necessary if the activity carried out by a foreigner falls under the so-called “ non-employment fiction ”. These non-employment fictions refer to cases in which no gainful employment is “fictitiously” carried out, although the activities carried out would actually fall under the definition of gainful employment.


There are the following non-employment fictions:


  • Activities of senior managers and C-level members (Section 3 BeschV),

  • Activities within the framework of work delivery contracts (Section 19 BeschV),

  • Business travellers (§ 16 BeschV),

  • in-company training (Section 17 BeschV).


No work permit is required for these activities. There are numerous other non-employment fictions, although some of these are very specific to individual cases. If in doubt, you can seek advice from a lawyer specializing in labor migration law.


2.2.3 Employment of students

Another special feature is the employment of foreign students. Students are allowed to work a total of 120 days or 240 half days per year (Section 16b, Paragraph 3 of the Residence Act). In order to avoid "sliding into illegality" with the work, the student's working hours should be recorded precisely in the personnel file. The days that can be counted do not include times when the student has carried out a student part-time job or (mandatory) student internships.

The 120/240 day rule is not only relevant for students to be employed during their studies, but also afterwards. It is therefore more common for foreigners who have completed their studies in Germany to apply for a job and then start working before their residence permit has been changed. In these cases, the 120/240 day rule still applies, even though the studies have been completed. A work permit or a fictitious certificate for early employment (Section 81 Paragraph 5 of the Residence Act) must therefore be applied for.

2.2.3 Employment of students

Another special feature is the employment of foreign students. Students are allowed to work a total of 120 days or 240 half days per year (Section 16b, Paragraph 3 of the Residence Act). In order to avoid "sliding into illegality" with the work, the student's working hours should be recorded precisely in the personnel file. The days that can be counted do not include times when the student has carried out a student part-time job or (mandatory) student internships.

The 120/240 day rule is not only relevant for students to be employed during their studies, but also afterwards. It is therefore more common for foreigners who have completed their studies in Germany to apply for a job and then start working before their residence permit has been changed. In these cases, the 120/240 day rule still applies, even though the studies have been completed. A work permit or a fictitious certificate for early employment (Section 81 Paragraph 5 of the Residence Act) must therefore be applied for.

Our cooperating independent lawyers for German visa law will be happy to assist you. Send us an e-mail, use the contact form or use our chat to book an initial consultation - our experts will respond immediately!

Do you have questions about residence law?
Please contact us!

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3. Renewal of work permit

When the residence permit (and thus also the work permit linked to the residence permit) expires, the employee and employer must jointly apply for an extension of the permit. Although the application must in principle be submitted by the employee, the employer must cooperate by completing the “ Declaration of Employment Relationship ” (Section 39, Paragraph 4 of the Residence Act). In order to renew the work permit, it is not necessary that the extension application is actually approved if the previous work permit already permitted the activity carried out (so-called “ fictitious effect ”). If the gainful employment or employment is no longer permitted before the extension (e.g. for students with the 120/240 day rule), the permission of the immigration authorities must be awaited.

Can there be a work permit without a residence permit?

Theoretically, a work permit can be issued without a residence permit. In practical terms, however, this is not provided for by law, so in practice a work permit without a residence permit is not issued.

4. Apply for a work permit from the Federal Employment Agency

If you apply for approval from the Federal Employment Agency, you can apply for this either by way of “pre-approval” or during the visa procedure.4.1 Pre-approval from the Federal Employment Agency


4.1 Preliminary approval of the Federal Agency

What is a “pre-approval” from the Federal Employment Agency?

In principle, visas for the purpose of pursuing gainful employment require the Federal Employment Agency to approve the employment and the visa (Section 39, Paragraph 1 of the Residence Act). This is intended to monitor and, if necessary, control immigration into the German labor market. Approval from the Federal Employment Agency can be requested before applying for a visa. This is called “pre-approval.” In practice, the pre-approval procedure is particularly useful in cases where it is unclear whether the Federal Employment Agency would approve the employment . If the Federal Employment Agency rejects approval (in advance), the rejection fee for the visa does not have to be paid, since no visa has yet been applied for. Such uncertainties usually exist in the following case groups, for example:


  • certain employment contract clauses entail legal risks (e.g. temporary employment, foreign posting clauses or net wage agreements),

  • it is unclear whether the authorities recognize the worker’s qualifications ,

  • the employee’s salary is slightly below the average wage of Germans,

  • a large number of visa procedures are to be carried out at the same time,

  • No appointments are available for normal visa applications.


As a rule, it will not be advisable to apply for a work permit from the Federal Employment Agency by way of prior approval. In most cases, the application simply requires that the declaration of employment relationship be submitted to the embassy or the immigration office. The latter will then submit the declaration to the Federal Employment Agency.


4.2 When does the Federal Employment Agency grant approval for employment?

After the declaration of employment has been submitted, the Federal Employment Agency will check whether approval can be granted. The Federal Employment Agency will grant approval for employment if... the foreigner is employed under the same working conditions as German employees (prohibition of discrimination, Section 39 Paragraph 2 Sentence 1 No. 1 of the Residence Act) and... the employment contract does not violate German labor laws (Section 40 of the Residence Act) and... there are no prohibitions on approval.

4.2.1 No discrimination against foreigners

In many cases, the Federal Employment Agency fails to give its approval because the foreigner is discriminated against in the employment contract . The most common case of discrimination is a salary that is too low. The foreigner must therefore earn the same amount as a German in the corresponding position . How much German employees earn in a certain position can be checked in the so-called salary atlas of the Federal Employment Agency . The foreigner must therefore earn at least approximately as much as is stated in the salary atlas for the corresponding position.


4.2.2 Legality of the employment contract

Another requirement for the approval of the Federal Employment Agency is that the employment contract does not violate mandatory labor law. In practice, this means above all that there are no violations of the following regulations:


  • no violation of the maximum working hours (ArbZG),

  • Granting of minimum holiday (BUrlG),

  • Compliance with the minimum wage (MiLoG),

  • Compliance with the Evidence Act (NachwG).


4.2.3 Further requirements

The Residence Act stipulates numerous other requirements, which are, however, generally not relevant in practice. For example, the Federal Employment Agency can (at its discretion) refuse approval if the employer regularly violates social security or tax obligations (Section 40 Paragraph 3 No. 1 Residence Act), is insolvent (Section 40 Paragraph 3 No. 2 Residence Act) or the employee is to work as a temporary worker (does not apply to the Blue Card). In practice, there may also be doubts about the “plausibility”, as approval can also be refused if “the employer or the receiving branch was founded primarily for the purpose of facilitating the entry and residence of foreigners for the purpose of employment; the same applies if the employment relationship was established primarily for this purpose” (Section 40 Paragraph 3 No. 7 Residence Act). If in doubt, a lawyer specializing in migration law can advise you on this.

4.3 Statement on employment relationship

The above-mentioned requirements are regularly verified by submitting the “ declaration of employment relationship ”. In this respect, the employer must “provide information on wages, working hours and other working conditions to the Federal Employment Agency in order to grant its approval” (Section 39, Paragraph 4, Sentence 1 of the Residence Act). This information is provided by the declaration of employment relationship.


Filling out the basic form of the employment relationship declaration is relatively self-explanatory. The additional sheets only need to be filled out if an application for approval of employment with a deficit notice (e.g. for nursing staff) is submitted ( additional sheet A ) or if a secondment (e.g. as an ICT card) is requested ( additional sheet B ).


When submitting the declaration of employment, you should make sure that it is always signed and stamped . Legally speaking, this is not necessary, but you can save yourself long discussions and processing times if you simply comply with the authorities' wishes. It is therefore generally advisable to submit the declaration of employment in the original if the embassy requests it (even if the document has to be sent halfway around the world by post).

5. Revocation of work permit

Finally, it should be noted that the work permit can also be withdrawn. In practice, however, this is relatively rare. The most relevant cases here are the employer's insolvency and certain criminal offenses (see Sections 39 and 40 of the Residence Act).

If you are threatened with having your work permit revoked, you should contact a lawyer specializing in labor migration law. The revocation of your work permit can have serious consequences.

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Do you need advice on visa law?
Contact us!

Our cooperating independent lawyers for German visa law will be happy to assist you. Send us an e-mail, use the contact form or use our chat to book an initial consultation - our experts will respond immediately!

6. FAQ (Human Resource Compliance)

What is meant by labour migration law?

Labor migration law includes the legal rules and regulations that govern the immigration of foreign workers into a country. It specifies the conditions under which non-EU citizens are allowed to work in Germany, which visas and permits are required, and which rights and obligations both employers and employees have. This area of law is regulated by a combination of national law, EU law, and international agreements.


What visas and residence permits does a non-EU citizen need to work in Germany?

Non-EU citizens usually need a special visa or residence permit to work in Germany. This often includes a work visa, which depends on the employee's qualifications. For example, highly qualified specialists can apply for an EU Blue Card. Before it is issued, it must be checked whether there is a job offer and whether priority checks by the Federal Employment Agency are necessary.

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