Special labour and residence laws apply to the employment of foreigners in Germany. These laws impose special obligations on both employers and employees. If the employer or employee does not fulfil these obligations, this constitutes illegal employment of foreigners. This can constitute both an administrative offence and a criminal offence. In serious cases or in repeat offences, the migration authorities can also ban the employment of foreigners for an employer altogether and impose entry bans on the employee.

To avoid this, employers are subject to the following obligations:

Verification of the work permit when hiring an employee (Section 4a para. 5 sentence 3 no. 1 AufenthG, Section 404 para. 1 no. 1 SGB III),
Keep a copy of the work permit and passport in the employee's file (Sec. 4a para. 5 sentence 3 no. 2 AufenthG),
Noting deadlines for the expiry of work permits and applying for the extension of a work permit in good time (Sec. 81 (4) AufenthG),
Issuing employer certificates so that the foreigner can fulfil his/her obligation to cooperate with the immigration authorities (§ 82 Para. 1 AufenthG),
not commissioning subcontractors who violate the right of residence (Section 4a (5) sentence 1 AufenthG),
notify the immigration authority if a foreigner's employment relationship has been terminated (Section 4a (5) sentence 3 no.

1.2 Consequences of illegal employment

The following penalties may be imposed if the above obligations are breached:

1.2.1 Possible penalties Employer illegal employment

Fine of up to 500,000 euros (§ 404 Para. 3 SGB IV),
General ban on employing foreigners (Sections 98 (2a) No. 1, 40 (3) AufenthG),
imprisonment for up to one year in serious repeat offences (Section 11 (1) no. 2 SchwarzArbG).

1.2.2 Possible penalties for employees in illegal employment

Fine of up to 5,000 euros (Sec. 98 (5) AufenthG),
Revocation of a residence permit and expulsion (§ 53 AufenthG, § 51 Para. 1 No. 4 AufenthG),
Issuing a ban on residence permits (Section 5 (1) No. 2 AufenthG),
entry ban (§ 11 Para. 1 AufenthG).

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

2. Work permit for foreigners

2.1 Work permit as an ancillary provision in the residence permit

Illegal or even criminal offences can be avoided if the human resources department employees 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 comparatively easy to understand: According to Section 4a (3) sentence 1 AufenthG, 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 pursuit of employment must be included in the residence permit. In other words, each residence permit must indicate whether and to what extent a foreigner is permitted to work (see image below). The corresponding provision can be entered either under "ancillary provisions" or on the so-called "supplementary sheet" (see image).

In order for the foreigner to be authorised to work in your company, one of the following ancillary provisions must be entered in the places marked red in the image:

"Gainful employment permitted"

The foreign national may carry out any employment and any self-employed activity. The foreigner can therefore be employed in any position in the company without any problems. This is usually the case for family reunification and the employment of nationals from the "best friends states" (in particular the USA and UK). The State Office for Immigration (LEA) in Berlin also generally issues Blue Cards with the additional condition "Gainful employment permitted".

"Employment as ... at ... permitted"

The foreigner may only work in the position specified in the additional provision at the company specified in the additional provision (so-called employer obligation). Activities other than those specified in the ancillary provision may not be carried out. This also applies in the event of a promotion and changes to the company form, which is why the work permit must also be renewed in these cases. Employment with employer ties is also relevant in the event of a change of employer or when hiring new employees, as the residence permits of new employees are usually still tied to the old employer. Here too, a new work permit must be applied for. Most skilled labour titles (in particular Section 18b (1) AufenthG and the EU Blue Card) are issued with the additional condition "Employment permitted".

"Self-employment permitted"

This ancillary provision only permits self-employment (e.g. for freelancers and entrepreneurs). Employment of foreign nationals with this ancillary provision is not permitted. Although employment as a freelancer (i.e. for the account of the employee) is possible, the risk of bogus self-employment should always be taken into account.

"Gainful employment not permitted"

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

2.2 Which employees do not need a work permit?

2.2.1 Work permit for EU citizens

However, not all foreigners can present a work permit, as not all foreigners require a work permit. This applies in particular to EU citizens. European citizens do not need a work permit due to the European freedom of movement, as the Residence Act does not apply to EU citizens at all (§ 1 Para. 2 No. 1 Residence Act). European citizens also do not receive a permit (even if they explicitly apply for a work permit). Although the State Office for Immigration (LEA) in Berlin issued "declaratory" residence cards to EU citizens until some time ago, 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 for non-employment fictions

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

The following non-employment fictions exist:

Activities of executive employees and C-level members (Section 3 BeschV),
Activities within the framework of contracts for work and labour (§ 19 BeschV),
Business travellers (§ 16 BeschV),
company training programmes (§ 17 BeschV).

No work permit is therefore required for these activities. There are numerous other non-employment fictions, although these are sometimes very case-specific. If in doubt, you can seek advice on this from a lawyer specialising in labour migration law.

2.2.3 Employment of students

The employment of foreign students is also a special case. In this respect, students may work for a total of 120 days or 240 half days per year (Sec. 16b (3) AufenthG). In order not to "slip into illegality" with the work, a precise record of the working hours should be made in the student's personal file. The countable days do not include periods in which the student has carried out a student part-time job or (compulsory) student internships.

However, the 120/240 day rule is not only relevant for the employment of students during their studies, but also afterwards. It is therefore more common for foreigners who have completed their studies in Germany to apply and then start working before their residence title 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 (§ 81 Para. 5 AufenthG) must therefore still be applied for.

3. Renewal of the work permit

If the residence permit (and therefore also the work permit associated with the residence permit) expires, the employee and employer must jointly apply to extend the permit. Although the application must always be submitted by the employee, the employer must co-operate by completing the "Declaration on the employment relationship" (Section 39 (4) AufenthG). For the renewal of the work permit, it is not necessary for the renewal application to actually be granted if the activity carried out was already permitted with the previous work permit (so-called "fictitious effect"). However, if the gainful employment or employment is no longer permitted before the extension (e.g. for students with the 120/240-day regulation), you must wait for permission from the immigration authority.

Is it possible to obtain a work permit without a residence title?

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

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 "advance approval" or during the visa procedure.

4.1 Prior approval of the Federal Agency

What is "advance approval" from the Federal Employment Agency?

In principle, visas for gainful employment require the approval of the Federal Employment Agency for the gainful employment and the visa (Section 39 (1) Residence Act). This is intended to control and, if necessary, manage immigration into the German labour market.

The approval of the Federal Employment Agency can be applied for before applying for a visa. This is called "advance approval". In practice, the advance approval procedure is particularly useful in cases where it is unclear whether the Federal Employment Agency would approve the gainful employment. If the Federal Employment Agency rejects the approval (in advance), the visa rejection fee does not have to be paid, as no visa has yet been applied for. As a rule, such uncertainties exist in the following groups of cases, for example:

certain clauses in employment contracts harbour legal risks (e.g. employee leasing, foreign secondment clauses or net salary agreements),
It is unclear whether the authorities recognise the employee's qualifications,
the employee's salary is slightly below the average salary of Germans,
a large number of visa procedures are to be carried out at the same time,
there are no deadlines available for normal visa applications.

As a rule, it will not be advisable to apply for a work permit from the Federal Employment Agency in advance. In most cases, a declaration of employment must simply be submitted to the embassy or foreigners authority for the application. The latter will then submit the declaration to the Federal Employment Agency.

4.2 When does the Federal Employment Agency give its approval for employment?

Once the declaration of employment has been submitted, the Federal Employment Agency will examine the possibility of granting approval. The Federal Employment Agency will approve the employment if ...

... the foreigner is employed under the same working conditions as German employees (prohibition of discrimination, § 39 para. 2 sentence 1 no. 1 AufenthG) and

... the employment contract does not violate German labour laws (Sec. 40 AufenthG) and

... there are no prohibitions on consent.

4.2.1 No discrimination against foreigners

In many cases, approval by the Federal Employment Agency fails because the employment contract discriminates against the foreigner. The most common case of discrimination is a salary that is too low. In this respect, the foreigner must earn just as much as a German in the corresponding position. How much German employees earn in a certain position can be checked in the so-called remuneration atlas of the Federal Employment Agency. In this respect, the foreigner must 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

A further requirement for the approval of the Federal Employment Agency is that the employment contract does not violate mandatory labour 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 law on the provision of evidence (NachwG).

4.2.3 Further requirements

The Residence Act provides for numerous other requirements, although these are not usually relevant in practice. For example, the Federal Employment Agency may (at its discretion) refuse approval if the employer regularly breaches social security or tax obligations (Sec. 40 (3) No. 1 AufenthG), is insolvent (Sec. 40 (3) No. 2 AufenthG) 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 consent can also be refused if "the employer or the host establishment was established 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" (Sec. 40 para. 3 no. 7 AufenthG). If in doubt, a lawyer specialising in migration law can advise you on this.

4.3 Declaration on the employment relationship

The aforementioned requirements are regularly verified by submitting a "declaration of employment". In this respect, the employer "must provide information on pay, working hours and other working conditions in order to obtain the approval of the Federal Employment Agency" (Section 39 (4) sentence 1 AufenthG). This information is provided by the declaration of employment.

Completing the basic form of the declaration of employment is relatively self-explanatory. The supplementary sheets only need to be completed if an application for approval of employment with a deficit notice (e.g. for carers) is submitted (supplementary sheet A) or if a posting (e.g. as an ICT card) is applied for (supplementary sheet B).

When submitting the declaration of employment, please ensure that it is always signed and stamped. Although this is not legally necessary, you can save yourself lengthy discussions and processing times by simply complying with the authorities' wishes. It is therefore generally advisable to submit the original declaration of employment if the embassy requires this (even if the document has to be sent halfway around the world by post).

4.4 Priority check

Completely independently of the approval for employment described above, a so-called "priority check" must also be carried out in certain cases. Here, the Federal Employment Agency checks whether the employment can also be carried out by a German employee (with priority). However, in times of a shortage of skilled labour, this regulation has almost completely lost its significance and is currently hardly applied by the authorities. It has therefore been abolished by the legislator in the vast majority of cases. The priority check is only still relevant in practice for low-wage employment from certain countries (see e.g. Section 26 BeschV).

5. Withdrawal of the work permit

Finally, it should be noted that the work permit can also be revoked. In practice, however, this happens comparatively rarely. Insolvencies of the employer and certain criminal offences (see §§ 39, 40 AufenthG) are particularly relevant in this respect. If in doubt, a lawyer specialising in migration law can advise you on this.

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