Proposed German employment law changes in 2026: what employers need to know
Germany is considering several employment law reforms that could affect how employers manage working time, fixed-term contracts, time registration and sickness absence.
For international companies employing people in Germany, these developments deserve attention. They could influence contracts, HR policies and everyday workforce management. However, the most important point is that the announced measures are not yet final legislation. Their wording, implementation dates and practical impact may still change during the legislative process.
Here is what currently applies, what the German government is proposing and what employers can do now.
1. A weekly instead of daily working-time limit
Under Germany’s current Working Time Act, an employee’s working day is generally limited to eight hours. It may be extended to ten hours when the employee’s average working time is brought back to eight hours within the required reference period.
The coalition intends to create the possibility of calculating maximum working time on a weekly rather than daily basis. Its stated aim is to give employers and employees more flexibility while retaining existing rest requirements and employee protections. The precise structure will be developed in consultation with social partners.
This does not mean that 12-hour working days have already been approved. Whether longer individual working days become possible will depend on the final legislation and factors such as rest periods, contractual arrangements and collective agreements.
For employers, a weekly framework could affect:
- Shift and workforce scheduling
- Overtime and working-time policies
- Manager responsibilities
- Employee wellbeing and workload monitoring
- Collective or works council arrangements
Employers should therefore monitor the reform, but should not introduce longer working days based on the announcement alone. The existing requirement for at least 11 consecutive hours of rest between working days remains applicable, including for employees working shifts. In practice, longer working days could make this requirement more difficult to meet, increasing compliance risks if schedules are not carefully managed.
2. A clearer framework for electronic time registration
Working-time registration is not an entirely new obligation in Germany. The Federal Labour Court ruled in 2022 that employers must introduce a system through which employees’ total working time can be recorded. Employers cannot simply wait for a new law before addressing this requirement.
The coalition now plans to create a clearer statutory framework for electronic time registration. It has also indicated that appropriate transitional arrangements should be available for small and medium-sized companies.
International employers should review whether their current system accurately records:
- The beginning and end of the working day, including break times
- Total hours worked
- Overtime
- Working patterns for remote and mobile employees
- Records across different locations or employment structures
The right solution will depend on the organisation. A growing technology company with flexible schedules may need a different system from a business managing shifts or multiple German locations.
3. Longer fixed-term contracts without an objective reason
Under the current general rule, an employer can enter into a fixed-term contract without an objective reason for up to two years. Within that period, the contract can generally be extended no more than three times. Fixed-term employment without an objective reason is normally unavailable when the employee has previously worked for the same employer, although separate rules and exceptions can apply.
In July 2026, the governing coalition announced that these contracts could in future last for up to 48 months, with up to six extensions. The proposal may also include exemptions for certain age groups or specific circumstances. The government presented the measure as a way to support job creation, particularly among start-ups and expanding businesses.
This could provide employers with more flexibility, but it may also create new compliance questions. Businesses will need to understand:
- Which employees and employers qualify
- How many extensions are permitted
- Whether previous employment remains relevant
- Which effective date and transitional rules apply
- Whether collective agreements change the position
Until legislation has been adopted, employers should continue applying the current rules.
4. Could fixed-term contracts become easier to sign digitally?
Under current German law, the fixed-term clause in an employment contract must satisfy the statutory written-form requirement to be effective.
Parakar Germany is also monitoring discussions around replacing this requirement with a more flexible text-form standard, potentially from 1 January 2027. This could make digital contracting and international onboarding easier.
However, this point should not yet be treated as confirmed legislation. Employers should continue following the current written-form requirements until the change, its scope and its effective date have been officially established.
5. Medical certification from the first day of illness
Currently, employees must immediately inform their employer when they are unable to work. The statutory default requires medical confirmation when the incapacity lasts longer than three calendar days, although an employer can already request confirmation earlier.
The government has announced plans to require sickness certification from the first day of illness and to discontinue sick notes issued by telephone.
A general first-day requirement could affect:
- Sickness and absence policies
- Employee and manager communication
- Payroll and HR administration
- Electronic sickness reporting processes
- Employees’ ability to obtain timely medical confirmation
Employers should wait for the final legislation before changing their policies, while considering how their systems would handle a first-day requirement.
What can employers do now?
Preparation does not mean implementing proposals before they become law. It means understanding where the organisation could be affected and making sure current processes are compliant.
Employers can already:
- Review their working-time and overtime policies
- Assess whether their time-registration system meets current requirements
- Check existing fixed-term contract templates and signing processes
- Review sickness absence procedures
- Identify policies that may require updating
- Assign responsibility for monitoring the legislative process
- Prepare clear communication for managers and employees
For international employers, the challenge is rarely understanding one change in isolation. German requirements must be aligned with wider European HR processes, internal policies and the needs of the workforce.
Preparing for change without acting too early
Germany’s proposed reforms could give employers greater flexibility, but the final details will determine how useful and how complex that flexibility becomes.
Parakar’s local German specialists monitor these developments as part of a wider European employment perspective. We help international companies understand the rules, translate them into practical HR processes and develop an approach tailored to their workforce.
Employing people in Germany or reviewing your HR processes? Our local experts can help you understand the current rules, monitor the reforms and prepare an approach that fits your organisation.
* This article provides general information and does not constitute individual legal advice. The final requirements will be verified once the relevant legislation has been adopted.
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