German customs (Zollamt) plays a key role in control of posted workers by foreign employers to perform work or provide services in Germany. Customs (a unit FKS - Finanzkontrolle Schwarzarbeit) take control measures primarily to combat illegal employment and enforcement of minimum wage and working conditions.
Potential control of the posting of workers and the spectre of its negative effects in the form of sanctions may act as a deterrent to Polish entrepreneurs wishing to operate in this area. We recommend reading our article on possible the consequences of the irregular posting of workers to Germany.
Adequate preparation key to a positive Zollamt audit
It is important to point out that a prior consultation of the requirements for the posting process and a legal analysis will ensure that the process is positive and that you are comprehensively prepared for possible inspections. You will thus be able to avoid the aforementioned negative consequences and take advantage of the opportunity to expand your business to a foreign market without unnecessary stress, such as the posting of employees to Germany.
Employer's obligations when posting workers to Germany
An employer posting workers to Germany has a number of obligations that must be met in order for this activity to take place correctly, i.e. in accordance with the requirements of the German law. In this context, the provisions of the German Minimum Wage Act (Mindestlohngesetz) and the Law on the Posting of Workers (Arbeitnehmer-Entsendegesetz). Furthermore, in the case of temporary employees, the regulation of the Act on the Employment of Temporary Employees (Arbeitnehmerüberlassungsgesetz).
In the context of the posting of employees to Germany, you may also be interested in our earlier article in which we point out new regulations under german law in this area.
Obligation to notify the employee (Meldepflicht)
Notification in accordance with the Minimum Wage Act (Mindestlohngesetz)
Employers based abroad who send employees to Germany are obliged under the provisions of the Minimum Wage Act to employee notifications, if the posting relates to an industry designated in the provisions of the German Unlawful Work Act (Schwarzarbeitsbekämpfungsgesetz). These include the assembly and dismantling of fairs and exhibitions, construction, catering and hospitality, cleaning of buildings, passenger transport.
Important: with regard to the application of the Minimum Wage Act in cross-border road transport of passengers and goods, there are separate provisions specifying when the posting of workers takes place and how the notification must be made.
Notification in accordance with the Posting of Workers Act (Arbeitnehmer-Entsendegesetz)
Employers based abroad who send employees to Germany are obliged to declare the employee in industries covered by the Posting of Workers Act, where minimum working conditions stipulated by collective agreements and/or contributions to the holiday fund apply. These include ground handling services at German commercial airports, roofing crafts, electrical crafts, building cleaning services, construction of gardens, green spaces and sports fields.
Notification in accordance with the Temporary Agency Workers Act (Arbeitnehmerüberlassungsgesetz)
Employers hiring employees to perform work or provide services in Germany are obliged to notify the employee. The notification will take place depending on the industry in which the temporary worker is employed, i.e. under the German Minimum Wage Act (Mindestlohngesetz) or the Posting of Workers Act (Arbeitnehmer-Entsendegesetz) or the Employment of Temporary Workers Act (Arbeitnehmerüberlassungsgesetz). If the obligation to notify arises from several legal bases, a single notification is sufficient.
Exceptions to the obligation to notify the employee
There are some exceptions to the notification obligation, such as when the employee has a high gross salary or is a family member of the employer (spouse, registered partner, child or parent of the employer). However, the exceptions do not apply to the notification obligation for drivers carrying out freight or passenger transport.
Documentation required by the Zollamt - what to prepare?
As a foreign-based employer, you are obliged to keep a within Germany (at the request of the control body also at the place of employment and, in the case of construction services, at construction sites) of the documents necessary to control compliance with legal obligations in German and to present them to customs upon request. These are:
- employment contracts (Arbeitsverträge) or documents from which the substantive content of the employment relationship emerges,
- wage settlements (Lohnabrechnungen),
- proof of payment of wages (Nachweise über erfolgte Lohnzahlungen),
- time records (Arbeitszeitnachweise), from which the beginning, end and duration of the daily working time are derived.
If other additional documents are found to be necessary during the inspection, they must be made available to the authority upon request.
Obligation of the employee to have an identity document
In addition, it is important to bear in mind obligation to have an identity document (identity card, passport) and about the obligation for employees posted to perform work or provide services in one of the following industries to present it at the request of customs:
- construction (Baugewerbe),
- catering and hotel business (Gaststätten- und Beherbergungsgewerbe),
- passenger transport (Personenbeförderungsgewerbe),
- forwarding, transport and related logistics services (Speditions-, Transport- und damit verbundenes Logistikgewerbe),
- entertainment industry (Schaustellergewerbe),
- forestry companies (Unternehmen der Forstwirtschaft),
- building cleaning (Gebäudereinigungsgewerbe),
- companies that assemble and dismantle fairs and exhibitions,
- meat industry (Fleischwirtschaft),
- prostitution (Prostitutionsgewerbe),
- security and safety services (Wach- und Sicherheitsgewerbe).
The absence of an identity document in the aforementioned case constitutes an offence and may be subject to a fine. It is incumbent on an employer posting employees to Germany to inform each of its employees of their obligation to hold and show an identity document. We recommend that this is done in a written and demonstrable manner.
Important: Employees must also produce other required documents upon request, such as staff cards or permits to work in the EU or required residence permits.
How does the Zollamt control work in practice?
When carrying out checks on the posting of workers, German customs services primarily verify the documents held by the employer and the workers. On the basis of the information obtained during the inspection, they assess the correctness of the employment contracts, including in particular compliance with the requirements under the German Minimum Wage Act (Mindestlohngesetz), and the fulfilment of the posting employer's information obligations.
As an employer based abroad who posts employees, you are obliged to tolerate this control and actively cooperate.
German customs can carry out both announced and unannounced inspections. They take place during the company's normal opening hours or during working hours. The following rules apply during inspections:
- inspectors identify themselves on arrival at the site and the start of the inspection is recorded,
- during the inspection, the parties concerned are informed of the facts established and their possible consequences,
- control is limited to relevant issues.
Control not only concerns the employer, but also the employees themselves. It is also incumbent on the employees to tolerate the control and to actively participate in it. The posting employer should inform posted employees of their obligations in relation to possible inspections.
Control of the posting of workers - Frequently Asked Questions (FAQ)
What is Zollamt and why does it control posted workers? The Zollamt is the German customs administration and its FKS (Finanzkontrolle Schwarzarbeit) unit is responsible for combating black labour and verifying compliance with minimum wage regulations. The controls aim to protect the labour market and ensure fair employment conditions.
Is the Zollamt inspection always announced? No, most inspections, especially in industries such as construction or transport, take place without prior notice in order to verify the facts at the workplace as accurately as possible.
What are the most common mistakes made by Polish companies resulting in penalties? The most common problems are the failure to declare employees on the Meldeportal-Mindestlohn portal, missing or incorrectly maintained time records and the failure to have the required documents translated into German on site in Germany.
What are the penalties for non-compliance with posting rules? Financial penalties can be very high and reach tens or even hundreds of thousands of euros, depending on the scale of the violations. They can include, among other things, fines for failure to notify, failure to comply with the minimum wage or failure to provide the required documentation.
Summary: Controlling delegation without stress
A posting control by German customs need not be a cause for stress. Adequate preparation in advance (notification of employees, possession of the required documentation) and cooperation with the control authorities during the course of it is sufficient.
We encourage you to contact our law firm to obtain assurance that your posting activities are lawful and to verify your preparedness for possible audits.
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