What Expats Miss in Their German Employment Contract

German employment contracts contain clauses that work very differently from what expats expect. Overtime provisions, exclusion periods, non-competes, probation: here’s what to look for.

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Sign nothing you haven’t understood.

German employment contracts look straightforward. They often run to a few pages, cover the basics: start date, salary, hours, holiday, and use reasonably plain language. Some are even in English.

But several clauses work in ways that won’t be obvious if your frame of reference is employment contracts from another country. Here are the ones that catch expats most often.

Probationary period (Probezeit)

Most German contracts include a probationary period of up to six months. During that time, both sides can terminate the employment with just two weeks' notice, and the standard dismissal protection rules (Kündigungsschutz) don’t apply.

In the first six months, your employer can dismiss you with minimal notice and no requirement to give a reason that would satisfy a court. You can still challenge a dismissal (the three-week filing deadline applies), but the legal standards are lower.

After six months in a company with more than ten employees, full dismissal protection kicks in automatically. No clause in the contract can extend probation beyond six months.

Overtime provisions

Many German employment contracts contain clauses saying that overtime is „included in” or „compensated by” the salary. These clauses have limits. Courts have ruled that blanket overtime clauses are invalid if they’re disproportionate: if the clause would require you to work significantly more hours without any additional pay, it may not hold up.

If you’re regularly working significantly more than your contracted hours, it’s worth checking whether the overtime clause in your contract is actually enforceable.

Exclusion periods (Ausschlussfristen)

This is one of the most consequential clauses and one of the least understood. Many contracts contain a provision stating that all claims from the employment relationship must be asserted within three months, sometimes three months to assert in writing, then another three months to file in court.

This means wage claims, holiday pay, bonus claims, and other entitlements expire if you don’t demand them within that period. The general statutory limitation period of three years doesn’t apply if there’s a valid contractual exclusion clause.

These clauses must exempt minimum wage claims to be valid, but otherwise they’re enforceable. Check yours. Act on any claims before the deadline.

Non-compete clauses (Wettbewerbsverbot)

Post-employment non-compete clauses are enforceable in Germany, but only if the employer pays you compensation of at least half your last contractual salary for the entire duration of the restriction. Non-competes without this compensation aren’t binding on you (though you then can’t claim the compensation either).

The maximum duration is two years. If you’ve signed a non-compete, check both whether the compensation is contractually committed and what it covers.

What’s above your contract

Your individual contract sits at the bottom of a hierarchy. A collective bargaining agreement (Tarifvertrag) your employer is subject to, or a works agreement (Betriebsvereinbarung) negotiated with the works council, can override your contract in both directions: giving you more, or occasionally less than what the contract says.

You may not have been told these documents exist. Your employer is obliged to tell you if a Tarifvertrag applies. Ask specifically.

The termination agreement (Aufhebungsvertrag)

If your employer offers you a mutual termination agreement rather than a formal dismissal, treat it carefully. Signing one typically means waiving your right to challenge the end of employment, and may trigger a temporary suspension of unemployment benefits (Sperrzeit at the Agentur für Arbeit). Never sign one under time pressure without having it reviewed first.

FAQ

My contract is in English. Does German law still apply? Yes. The language of the contract doesn’t determine which law governs it. If you work in Germany, German employment law applies.

My employer is asking me to sign an updated contract. Do I have to? No, but refusing may trigger a Änderungskündigung, a dismissal combined with an offer of changed terms. This is a specific legal mechanism with its own rules. Get advice before you respond.

Can I negotiate the contract before signing? Yes. Employment contracts in Germany are negotiable, especially at senior levels. What’s non-negotiable is what statute requires: minimum notice periods, minimum holiday, dismissal protection.

Something in my contract looks wrong to me. What should I do? Get it reviewed before you sign if possible. After signing, some clauses can still be challenged as invalid, but it’s easier to address problems before they become live disputes.

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