If you are going to do business in Germany, you may want to do so with your own Dutch employees.
Contrary to what many people think, they cannot simply cross the border and get started. If you send your Dutch staff to work in Germany, this is called ‘cross-border work’. To do this, you must arrange a number of things in advance. You also need to take a number of things into account. You can read more about it in this article.
In Germany, relatively many professions and activities are regulated. This means that they may not be practiced without training or experience. In the Netherlands, for example, this applies to doctors and lawyers, but in Germany this also applies to certain craft activities, for example in construction. A list of these professions regulated in Germany can be found on the European Commission website.
Even if you are based in the Netherlands and only want to carry out these activities in Germany temporarily, you must take this into account. In many cases you will have to register your employees in advance with a so-called Handwerkskammer.
Depending on the industry in which you operate, you must also register your employees with the German Zoll (customs).
In this notification you must indicate who, where and when will be working in Germany. You must also indicate who is authorized to speak to German customs on your behalf during a workplace inspection. You must also provide the German address where the documents are located with which you can demonstrate that you comply with German legislation and collective labor agreements (see point 3 below).
It is good to know that German customs strictly monitors this reporting obligation. Do you not comply? There may then be (high) fines, ranging from €1,500 to €30,000 and, if repeated, €500,000. A prison sentence may also follow. The reporting obligation does not apply to self-employed persons.
Even if you work with Dutch employees and a Dutch employment contract, as soon as there is cross-border work in Germany you must also comply with a number of German labor law provisions.
For example, you must pay the German statutory minimum wage. Does your staff fall within the scope of a German collective labor agreement? Then you will have to pay the (higher) minimum wage from this collective labor agreement. In addition, your staff will have a number of other rights under German law, such as the right to continued payment of wages during a holiday period. You must also take into account German working and rest times, occupational health and safety legislation and rules for equal treatment.
To demonstrate that you meet these requirements, you must document a number of things (in German!) and keep these documents at a German address. This includes the employment contract, a recent pay slip, proof of payment of wages, a time sheet and a location notification.
If your employees temporarily work as cross-border workers in Germany, they may be covered by German social security law for that period. Under certain conditions, an exception can be made and they can remain socially insured in the Netherlands. For this you must request a so-called ‘A1 statement’ from the Social Insurance Bank (SVB). Without an A1 declaration you run the risk of a fine from the labor inspectorate.
If there is cross-border work, you will also have to deal with the tax treaty between the Netherlands and Germany.
In principle, the main rule then applies that the country where an employee actually works has the right to levy payroll tax. However, the tax treaty includes an exception to this rule: the 183-day rule. If the 183-day scheme applies, the country where the employee lives has the right to levy payroll tax. You must then meet the following conditions:
Do you want to work in Germany with your Dutch staff? Then this is cross-border work and it is important that you obtain advice in advance about your obligations.
You can of course contact Heisterborg International for this. Our team of employment law and HR specialists is bilingual and familiar with international treaties and German labor law.
You can also choose to use Heisterborg International as your external HR department for your German activities. We will then take everything completely off your hands and you can continue doing business.
