Are you living and working in Germany? If yes then let me tell you something that nobody wants to think about but everyone needs to be prepared for. Its Job Loss in Germany!
Yes, it’s a tough subject, but it’s essential to know what steps to take if that unfortunate day ever comes. In this guide, ill share the crucial information you need to know in this situation. Everything from
- Residence Permit in Case of Job Loss in Germany
- What happens to your Health insurance
- Can you still claim unused vacation days if you are fired from your job
and Much more. Don’t let the fear of the unknown hold you back as I talk about Job Loss in Germany and share exactly what to do If You Get Fired in Germany,”
Job Loss in Germany? what to do!
Losing your job in Germany
In the world of employment, there are a few ways things can go sour. First, there’s the dreaded “laid off” scenario. It’s when your employer no longer needs your services, possibly due to financial difficulties. You could also be put on “Kurzarbeit,” which is when your employer reduces your working hours because of financial strain.
Then, there’s the harsh reality of getting “fired.” Usually, this doesn’t happen without a good reason, except during the probation period. The probation period, is a time when you’re still being evaluated. It’s during this period that you can be let go without needing a reason, but rest assured, you’ll typically receive written warnings before things escalate to that point. Of course, there are exceptions for serious misconduct.
But here’s the good news: once you’ve successfully completed your probation period, your employer needs a valid reason to fire you. And if you find yourself disagreeing with the given reason, you have a window of three weeks to challenge it by filing an “Action for unfair dismissal.”
Notice Period for Job Loss in Germany
When it’s time to say goodbye to your job, there are a few things you should know about the notice period. Even if you’re still in your probation period. If you happen to get laid off, you’re entitled to be paid until the notice period ends. During this period, your employer might keep you working or give you some time off.
Now, let’s talk about the not-so-pleasant scenario of being fired for misconduct. In such cases, there may not be a notice period. But don’t worry, there’s a possibility of negotiating for something called
Severance pay or “Abfindung” in Germany
This is an amount your employer pays you to leave without any legal disputes. However, keep in mind that you usually need to sign a termination agreement, referred to as “Aufhebungsvertrag,” to receive this payment.
Here’s the interesting part: you can actually negotiate the amount of severance pay you receive. As a general rule, you can expect to receive 0.5 times your monthly income (before taxes) for each year of employment. For example, if you’ve worked for an employer for five years, your severance pay would be equivalent to 2.5 months of income.
To navigate this process effectively, it’s wise to seek the guidance of a labor lawyer. They have the knowledge and expertise to help you. They can negotiate for a better severance package based on your specific circumstances. But going to a lawyer can be quite expensive, that is why I recommend that you get Legal Insurance.
If you feel that your job might be in trouble you should get this legal insurance as soon as you can, because most insurances have a waiting period of 3 months before it comes active. I have a detailed guide on why you should get legal insurance in Germany
Now It’s important to be aware that severance pay can impact your unemployment benefits. If the severance pay is substantial, you may lose out on three months of unemployment benefits.
In some cases, it might be more advantageous to decline severance pay and opt for unemployment benefits instead.
Related Guide: Why you should get legal insurance in Germany
Bad Employers in Germany can be complete tools
That is why you must think twice before signing a termination agreement suggested by your employer. If you sign it, you’re not technically getting fired; instead, you’re agreeing to leave your job.
But hold on, there are a few things you need to consider if you decide to sign that agreement. First, you’ll lose the protection against dismissal, or Kündigungsschutz. This means you won’t be able to sue your employer for firing you because you agreed to leave. Keep in mind that your employer wants you to sign the termination agreement because it’s a safer option for them.
On the brighter side, signing a termination agreement gives you the opportunity to negotiate better severance pay.
Another thing to note is that there’s no minimum notice period when you agree to leave. This can be beneficial if you’ve already secured another job and want to make a swift transition.
However, it’s important to be aware that signing the termination agreement can have implications for your unemployment benefits. Depending on the terms outlined in the agreement, you may risk losing three months of unemployment benefits. It’s crucial to understand how this could impact your financial situation before making a decision.
Because When you decide to sign a termination agreement. You’re essentially striking a deal with your employer. They’re willing to offer you more money, and in return, they’re hoping to avoid potential complications.
Remember, you have the right to accept, refuse, or negotiate this deal. Your employer cannot force you to sign an termination agreement. And If you’re unsure about what to do, always seek legal assistance.
What to do before you stop working?
There are a few important things you should do Before you stop working due to Job loss in Germany,
Make sure to register as a job seeker at the Agentur für Arbeit. You can do this either three months before your last day of work or within three days after learning that you will be unemployed. It’s crucial because it affects the amount of unemployment benefits you can receive.
When you know your last day of work, make sure to register as unemployed at the Agentur für Arbeit. This step is necessary to access unemployment benefits, so remember to do it within the last three months of your work.
It’s also important to inform your health insurance provider when you lose your job. Your coverage will generally remain the same, but there might be changes in the price. If you have private health insurance, you may need to consider switching to public health insurance. Depending on your insurance plan.
If you have a work visa or a Blue Card, you must inform the Ausländerbehörde about your unemployment status. It’s best to do this as soon as you know you will be unemployed, and make sure not to wait for more than two weeks.
To inform the Ausländerbehörde, you need to write a letter in German with your relevant information and include a copy of your termination notice . They will reply to you within four weeks and provide you with a timeframe of three to twelve months to find a job, depending on the specific Ausländerbehörde.
What happens to your pay and bonuses due to Job loss in Germany?
Until your last day of work, which is at the end of your notice period, your employer is legally obligated to pay you your full salary, even if they don’t require you to work. So, rest assured, you’ll receive your complete pay during this time in case of Job loss in Germany.
If your employer grants performance bonuses, you should still receive that bonus, even if you leave the company. The amount may be adjusted based on the time you spent working during the bonus period. For example, if you were supposed to receive a performance bonus annually but leave in November , you should receive at least 90% of the promised bonus.
What about unused vacation days. Well, Usually you are allowed to take your unused vacation days during your notice period. However, there are cases where your employer may choose to compensate you for those unused vacation days by making a payment to you.
It’s important to note that during your notice period, if you fall ill, you can still take sick leave as needed. And Your entitlement to sick leave remains as usual during this time.
What about Health Insurance in Job Loss
Well, If you have public health insurance, there’s good news! It can become cheaper or even free, while still providing the same coverage. In case you receive unemployment benefits, the Agentur für Arbeit takes care of your health insurance expenses, so you’re covered for free.
In case you don’t receive unemployment benefits, you’ll usually need to pay around 210€ per month. However, there’s a possibility that you can be covered for free if your spouse is working.
Now, let’s consider private health insurance. If you have private health insurance, it may become more expensive because your employer will no longer contribute half of the cost. However, the coverage remains the same.
If you receive unemployment benefits, you’ll typically need to switch to public health insurance, which will be covered by the Agentur für Arbeit.
In situations where you don’t receive unemployment benefits, you can continue with your private health insurance. However, keep in mind that your employer will no longer contribute their share. For instance, if your private health insurance costs 500€ per month, and your employer used to pay 250€ while you paid 250€, after losing your job, you’ll be responsible for the full 500€.
Before Starting a New Job in Germany
When you’re ready to start a new job, you may need permission from the Ausländerbehörde depending on how long you held your residence permit.
Check your Zusatzblatt. If your residence permit is tied to your employer, you’ll need to apply for a new work visa or Blue Card, which can take a few months.
However, if your residence permit is not connected to your employer, you’re not required to seek permission from the Ausländerbehörde to start a new job.
Forced to Leave Germany
Remember, if you’re unable to find a job within 3 to 12 months, your residence permit will expire, and you’ll need to leave Germany. But don’t worry, there are options to legally extend your stay.
For people with a spouse and children on family reunion visa, their stay in Germany is connected to your residence permit. So, as long as you can stay in Germany, they can stay too.
If your spouse finds employment, there’s an exciting opportunity to switch roles. Meaning that Your spouse can apply for a work visa, freelance visa, or Blue Card, while you can obtain a family reunion visa. This way, both of you can continue enjoying your time together in Germany.
Navigating the ups and downs of employment can be very difficult specially as an International in Germany, and sometimes you need help to face any situation head-on like in the case of Job loss in Germany. That is why it is absolutely essential to Get Professional Help . And make sure your read the Job contract correctly! Which I discuss in my guide on Job Contract in Germany and Must know Things before signing it!
Disclaimer: None of the content in this article is meant to be considered as legal, tax or investment advice, as I am not a financial expert or a lawyer and am only sharing my experience with stock investing. The information is based on my own research and is only accurate at the time of posting this article but may not be accurate at the time you are reading it.