Requirements for Foreign Employees to Work
In principle, every employee who would like to work in Germany requires a residence title and a work permit before entering Germany. This does not apply to persons who are: 1) of German nationality; 2) a European Union national; 3) a national of a European Economic Area (EEA) member state (Iceland, Liechtenstein, Norway); or 4) a national of Switzerland. Since 1 March 2020, the general conditions for the immigration of skilled workers from third countries (countries outside the EU/EEA) have been pressed forward. As a result of the changes in the German Residence Act, the so called “job market test” is no longer required if an employment contract can be presented. In addition, skilled workers from third countries can now immigrate to Germany for a limited period of time to look for a job, provided they can prove they have the necessary German language skills and can secure their living.
Does a Foreign Employer need to Establish or Work through a Local Entity to Hire an Employee?
No. The employer will, however, be obliged under the statutory social security system to appoint a contact person in Germany, which can be an employee. Intra-group transfers have been facilitated; non-EU citizens may, under certain circumstances, be entitled to a new residence title “ICT-Card”, which allows them to work for a German group entity for up to three years. This is possible if they have been posted by another group entity from outside the EU. Moreover, third-country nationals already residing and working in another EU member state, can apply for a “Mobile ICT-Card” if they need to be posted to Germany for a period longer than 90 days. In case of a short-term assignment (i.e. no more than 90 days within a 180-day period) no residence title will be necessary at all; the competent authority (i.e. the Federal Office for Migration and Refugees) just needs to be notified. Hence, third-country nationals can work in different EU member states under a single permit.
Limitations on Background Checks
There are no specific statutory regulations on the legitimacy of background checks carried out by a private employer. However, there is complex case law on the question of which information an employer may legitimately request from a job applicant during the course of a job interview, which can be considered as a benchmark for the legitimacy of background checks, using other sources than the applicant. In essence, employers may only request such information that has a direct relation to the applicant’s future tasks and responsibilities in the particular job in question. The protection of data privacy of the applicant is of special interest during the hiring process. Personal data may only be processed for employment-related purposes where necessary for hiring decisions or, after hiring, for carrying out or terminating the employment contract.
Restrictions on Application/Interview Questions
The employer has a significant interest in receiving as much information as possible about the future employee; however, the employer is only entitled to ask for information, which is necessary for entering into the employment relationship, e.g. qualifications that are required for employment. Questions concerning pregnancy, age, race/ethnic origin, sexual identity, religion, trade union affiliation or severe disability are generally not allowed in a job interview. The law to abolish unequal and unjustified treatment of employees based on certain criteria: race and ethnic origin, gender, religion or belief, disability, age or sexual orientation is of special significance during the hiring process; specifically as it restricts job advertisements and applicant selection (e.g. an advertisement for a “young team member” might indicate discrimination based on age). To avoid possible discrimination issues the employer should always base the rejection of an applicant on objective hiring criteria, such as job profile and required qualifications rather than on personal characteristics of the applicant. Furthermore, during the period of claims for damages due to discrimination, the employer should be able to prove his selection process and therefore should keep all documents.