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UNIONS

Jobs in Germany: Should foreign workers join a union?

For anyone working in Germany, it’s important to consider joining a union. Here are some points to think about.

Jobs in Germany: Should foreign workers join a union?
Members of the IG Metall Union at a rally in Berlin in June. Photo: DPA

Settling into a new job can be tricky – and it’s even harder if you’re in a new country where you are less familiar with your rights as an employee (or a freelancer). 

That’s why joining a union can be helpful. But it’s not for everyone. Here we give you an overview of trade unions in Germany and what they could provide. We also look at works councils in Germany. 

What are trade unions?

Trade unions are groups that aim to advance workers’ rights, and lobby for fair working conditions and improved pay.

In Germany they have a history stretching back to the German Revolution in 1848. Unions still have an important role in German society today. They also have strong influence at the political level, although as membership is declining, they do not wield as much power nowadays. 

The biggest organization is the German Confederation of Trade Unions (Deutscher Gewerkschaftsbund, DGB), which is the umbrella association of eight single trade unions, including the powerful IG Metall and Verdi. 

Unions offer a variety of services to their members, such as reviewing employment contracts and other legal support. They are generally focused around a specific profession or trade, such as the GEW (German Education Union), which supports teachers in schools, universities and kindergartens.

One of the biggest modern day milestones achieved in the recent past thanks to pressure from unions is the introduction of the minimum wage in Germany, which stands at €9.35 per hour.

Unions also negotiate contracts with state authorities over employment terms for their members, which can often constitute most of a sector’s workforce – so industrial disputes can become wide-ranging and serious.

Teachers in Germany are often part of the German Education Union (GEW). Photo: DPA

What else can they offer? 

Trade union membership can offer lots of benefits, especially when it comes to legal matters. 

Members receive free legal advice and representation by a lawyer on issues relating to labour law (for example, regarding pay, holiday leave, parental leave or dismissal). 

They can also advise on health insurance and long-term care insurance funds, unemployment insurance, pension insurance (illness, accidents at work, accidents on the way to or from work).

Unions can also get involved in topics related to social law and administrative law, and review employment contracts.  

Note that you need to have been a member of a union for three months before you are entitled to free legal advice and legal representation. 

Collective agreements

They also negotiate contracts with state authorities over employment terms for their members.

In Germany these are called collective agreements (Tarifverträge). This is a deal reached between a trade union and an employers’ association or an individual employer.

This agreement regulates the working conditions for the employment contracts to which it applies.

The working conditions regulated in these deals include, in particular, pay levels, working time, holiday leave and entitlement to bonuses.

In addition, collective agreements also contain provisions on breaks, probationary periods, notice periods and time limits for the enforcement of rights.

A collective agreement applies to you if you are a member of a trade union which concluded the agreement and your employer is bound by the agreement.

Rounds of collective bargaining in recent years have taken place in Germany’s public sector, and led to strikes as unions made demands for better pay and conditions.

How many people are members of unions in Germany?

According to recent figures, around a fifth of employees in Germany are union members, around 7.4 million people. 

The vast majority of union members are part of a union within the main union confederation, the DGB.

Research has shown that the number of people belonging to unions has fallen sharply since the early 1990s, partly due to the fall in manufacturing employment in eastern Germany following reunification. 

The largest single trade union in Germany is IG Metall, which, which as of 2014 had about 2.3 million members in metal (including automobile and machine building), electronics, steel, textile, wood and synthetics industries. 

Statistics for 2018 showed the the DGB’s eight member unions had a total of almost six million trade unionists. 

READ ALSO: German workers should be paid overtime: EU court

Do I have to pay?

In general, the monthly fee is 1 percent of the average gross monthly income.

There is, however, a discount for students, pensioners and job seekers pay lower fees. Those discounts are calculated differently depending on the trade union in question so remember to check when you are inquiring. 

What is a works council?

In Germany, trade unions do not have branches in the workplace. Instead, works councils (Betriebsräte) are the most important points of contact concerning problems in the workplace. Works councils also work closely with the trade unions.

The works council represents the interests of an organisation’s workforce. It checks whether the employer is complying with laws, as well as keeping an eye on occupational safety and health provisions, collective agreements and organisation-level agreements.

The works council also aims to promote the equal treatment of employees and the integration of foreign employees.

If there is no works council in your organisation, you can set one up. 

For more information on various unions in Germany visit the Arbeitsrechte.de website.

Member comments

  1. “What are trade unions?” This section was added for those Anglo-Americans born after the reigns of Regan & Thatcher who would probally not know that workers (as oposed to employers) are allowed to form collective groups. Once, a long time ago, in a kingdom not so far a way, this was also allowed.

  2. First off, thanks for the well-intentioned information! That said, the headline question is never answered and could therefore come across as clickbait.

    As mitigation, the article could be revised to focus on the actual prompt and expand from there:
    Should foreign workers join a union?
    Why and why not? What do trade unions offer or risk specifically for expats (as opposed to the general public)? What does union membership entail, in practice? How does the German system differ from or resemble “comparable” systems in home countries of most The Local readers (for example: USA, other EU countries, UK, India, China, etc.)? Are there functional overlaps between participating in workers councils versus joining an independent union? What are the advantages, disadvantages, and important things to consider as an expat?

    I could go on, but hopefully my point comes across — all meant constructively from a longtime subscriber!

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For members

WORKING IN GERMANY

7 tips for how to survive as a freelancer in Germany

Taking the decision to go it alone and freelance in Germany can be a daunting prospect. But, if you do it right, it can be an exciting and liberating path. Here are some of our top tips on how to survive.

7 tips for how to survive as a freelancer in Germany

1. Get a tax advisor

The German tax system is complicated, even for Germans. All the associated paperwork uses the Amtsprache (authority language) which is more like legalese than ‘normal’ German, and mistakes when filling out tax forms can cause you, at best, a massive headache and, at worst, a costly fine. So it’s best that you employ someone who knows what they’re doing to help you out.

That person is called a Steuerberater (tax advisor) in Germany. They will help you register with the tax office, correspond with them and submit your tax declarations.

Be aware that, in Germany, different deadlines apply for tax returns depending on whether you employ an official tax advisor or not. If you are doing the tax return on your own, the deadline for submitting your annual tax return is earlier than if you use a tax advisor’s services. 

READ ALSO: What NOT to do when you’re freelancing in Germany

When looking for a tax advisor, a top tip is to use your network to get recommendations. Ideally, you want someone who will do more than just fill in the forms for you, but who will actually advise you on how best to manage your business finances so that you can make tax savings.

2. Keep your accounting in order

The better you keep your own accounts in order, the easier it will be for your tax advisor to compile your tax declarations and therefore the cheaper their services will be.

As a freelancer, there are a lot of costs you can deduct from your taxes – from train tickets, working materials, to meals out – so it’s best to keep hold of all your receipts and to keep them in good order.

2 euros and 50 cents lie on a receipt in a beer garden. Photo: picture alliance/dpa | Peter Kneffel

In Germany, you’re obliged to keep hold of receipts for two years, in case of a tax inspection, so it’s a good idea to photocopy the type of machine-printed receipts you get from restaurants so that they stay legible for a long time.

There are also a few things to be aware of when writing your own invoices. Firstly, make sure that you include your tax number. This isn’t the 11-digit Steueridentifikationsnummer that everyone gets when registering in Germany, but the 10-digit Steuernummer you get from the Finanzamt after registering yourself as a freelancer. 

Most companies won’t pay you if you don’t have this on your invoices so make sure you include it.

You should also make sure that you number your invoices properly – ideally in ascending order so that you can easily keep track of them. You are not allowed to issue two invoices with the same number and if you do so and the finance office notices, you could face an inspection of your whole accounting system.

There are numerous great accounting software programmes you can use to help you, such as Lexoffice and Sevdesk and, even if you have to pay for them, the costs will be tax deductible!

3. Find out if you’re eligible for financial support

In Germany, there are several opportunities for freelancers to gain financial support and to cut their outgoings, and its worth finding out if you’re eligible for them.

If you’re claiming unemployment benefits under ALG 1 and are thinking about becoming a freelancer, the employment office offers a special type of financial support to help you to get your freelance business off the ground.

Called the Grundungszuschuss (“foundation grant”) the payment is a six-month grant equalling your monthly entitlement under ALG 1 plus €300 towards your insurance costs can be applied for those in receipt of this unemployment benefit.

READ ALSO: Will freelancers benefit from Germany’s €300 energy allowance?

If you are engaged in some form of artistic profession in Germany – which can include journalism to pottery – you may be entitled to membership to the Kunstlersozialkasse (artists’ social insurance).

Being a member of the KSK means you only have to pay half of your health insurance and pension contributions, and the KSK will pay the rest.

4. Work out how much you think you will earn

As with starting any business, you need to have some idea of your expected earnings from the outset.

If you’re just starting out as a freelancer, or have some freelance gigs on the side of an employment position, then it might be worth considering registering yourself as a Kleinunternehmer (“small business”).

As a Kleinunternehmer, you can currently earn up to €22.000 per year without having to charge VAT and having to submit only yearly tax declarations. 

An income tax declaration form lies on a table. Photo: picture alliance/dpa/dpa-Zentralbild | Hans-Jürgen Wiedl

Be aware that if you are registered as this kind of freelancer, you must include the following sentence in your invoices: ‘Gemäß § 19 UStG wird keine Umsatzsteuer berechnet’ which means ‘In accordance with Paragrah19 of the German VAT law, no VAT has been added to this invoice.’

READ ALSO: Everything you need to know about your German tax return in 2022

If you think you will earn more than €22.000 per year, you will need to pay Umsatzsteuer (VAT) and will have to submit tax declarations in advance and more often. Depending on how much you earn, this could be every month or every quarter. 

5. Get your insurance in order

In Germany, it’s a legal requirement to have health insurance.

If you’ve just made the move from employment to being a freelancer and want to keep the same health insurer, you should get in contact with your health insurance provider straight away to tell them about your change of circumstances. They will ask you to re-register and to tell them your projected freelance earnings for the year, so they can amend your monthly fees.

If you don’t keep your health insurer provider updated, you could continue to be charged the higher rate that you had from your previous salary.

The insurance cards of the health insurance companies DAK, AOK, Barmer and Techniker-Krankenkasse TK lie with euro notes under a stethoscope. Photo: picture alliance / dpa | Daniel Karmann

It’s not just health insurance you need to think about as a freelancer. It’s also wise to think about protecting yourself from any sort of claims that could arise as a result of any working mishaps. 

If, for example, you lose your laptop which contains confidential client information, you need to be protected against claims.

That’s why it’s good to have both Betriebshaftversicherung (business liability insurance) and Rechtschutzversicherung (legal protection insurance).

6. Plan your time wisely

All of these bureaucratic obligations take time. So it’s really important that you take account of that when planning your time. For example, planning half a day a week to deal with your invoices, filing, emails to clients, and conversations with authorities can be really beneficial when scheduling your working time. 

7. Grow your network

As a freelancer, networking is absolutely crucial to success. 

Keep an up-to-date profile on websites like LinkedIn and German equivalent XING and keep in contact with anyone you’ve ever worked with, no matter how brief the contact was. 

Having a network is not only about getting more clients, but also about building a support network in your field to exchange advice, tips and generally for your own enrichment. 

Participating in workshops related to your field, going to seminars, and meet-ups, can be great ways of broadening your network. 

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