The new version of the Verification Act: Need for action for employers as of 1 August 2022

On 23 June 2022, the Federal Parliament passed the bill to implement the EU Directive on transparent and foreseeable working conditions in the European Union in civil law (BT-Drs. 20/1636, 20/2245; committee version BT-Drs.20/2392). In particular, this amends the Verification Act, which lays down the employer's obligations regarding verifying essential working conditions. The law is to come into force on 1 August 2022. The new version makes employers binding commitments to act when drawing up and amending employment contracts.

Background

On 20 June 2019, the European Union adopted Directive (EU) 2019/1152 on transparent and predictable working conditions. Directive 2019/1152 (hereinafter RL) aims to create more transparency about European working conditions. The new directive must be implemented by the member states and thus also by Germany by 1 August 2022.

Most important amendments (Evidence Act)

The Federal Government's draft law partly goes beyond the mandatory requirements of the Directive. In the future, significantly more contractual content will have to be written. The employer must therefore provide the employee with (verifiable) proof of the working conditions specified in the law, signed by the employer in the original.

According to the draft law, the contractual conditions that must be set down in writing in the future include in particular:

• the duration of the agreed probationary period
• the composition and amount of remuneration, including remuneration for overtime, bonuses, allowances, premiums, and special payments, as well as other remuneration components. These shall be stated separately with their respective due dates and payment method (cash or non-cash).
• the working hours as well as the agreed rest breaks and rest periods
• in the case of agreed shift work, the shift system, shift rhythm, and conditions for shift changes
• the possibilities and conditions for ordering overtime
• in the case of work on-call, the minimum number of hours to be reimbursed, the period within which the work is to be "called off," and the time frame fixed for the performance of the work by designating reference days and reference hours
• any entitlement to training provided by the employer
• name and address of the pension provider, if the employer has agreed to
• provide a company pension through a pension provider
• procedure to be followed in the event of termination of the employment relationship, such as written form requirement, notice periods, the period for bringing an action for protection against dismissal
• a general reference to applicable collective agreements, company or service agreements
• extensive obligations to provide written evidence when employees are posted abroad

Many of the new obligations to provide evidence raise considerable legal uncertainties.

What is new is the extension of the obligation to provide evidence to include information on the termination procedure. The content and scope of this obligation have not yet been conclusively clarified.

Attention: Shortening of the deadline compared to the previous legal situation!

According to the current legal situation, the employer has to set the contract's essential terms one month after the agreed start of the employment relationship. In the future, the following will apply:

The draft law provides proof/delivery of certain information (such as the name of the contracting parties, amount of remuneration, and working hours) to be recorded as early as the first working day. For all other terms and conditions of employment to be proven, various deadlines are provided, ranging from the seventh calendar day to one month after the agreed start of the employment relationship. Note: From the employer's point of view, the complete proof should be fulfilled (at the latest) on the first day of work performance.

In the future, changes to the contract's essential terms must also be notified in writing on the day the change takes effect.

Employees who were already employed before 1 August shall, at their request, be given the minutes with further essential information no later than on the seventh day after the claim was made.

Sanctions in case of violation of the new employer obligations

So far, violations of the Evidence Act have been to the employer's detriment, especially in matters of evidence law. So far, there has been no provision for a fine. In the future, an additional administrative offense will be introduced.

The fine amounts to up to EUR 2,000.00 in the event of failure to fulfill the obligation to provide evidence or failure to do so correctly, entirely, or in the prescribed manner.