New rules for interns
Interns are tomorrow's specialists, and companies are more interested than ever in giving high potentials the opportunity for companies and interns to get to know one another.
New requirements since 1 January 2015
To prevent abuse in this respect (the issue here is widely known in Germany as "generation internship"), new requirements have applied since 1 January 2015 for internship contracts and the remuneration of interns due to the introduction of a minimum wage for certain internships by the German Minimum Wage Act (Mindestlohngesetz – MiLoG) and on the basis of new documentation obligations. Compliance with these requirements is enforced by (in some cases tough) sanctions. Non-compliance with minimum wage requirements for example is subject to a fine of up to EUR 500,000.00 (Section 21 (1) No. 9, para. 3 of the MiLoG). In the case of foreign interns, the absence of a required residence permit can likewise be penalized with a fine of up to EUR 500,000.00 (Section 404 (2) No. 3, (3) of the German Social Code Vol. III (Sozialgesetzbuch III – SGB III)). So what should companies do if they want to continue to enjoy the benefits of internships, but want to avoid such sanctions?
New contract form rules
The new Section 2 (1a) of the German Act on the Evidence of Employment Conditions (Nachweisgesetz – NachwG) requires that anyone employing an intern must do the following before the intern starts work:
- record the key contractual conditions in writing,
- sign this document and
- hand it out to the intern.
In practice, the internship agreement, which has to be entered into in writing, therefore should not only include the names and addresses of the contractual parties, the commencement date and duration of the internship, the regular number of hours worked per day as an intern, the payment and amount of remuneration and holiday entitlement, but should also state the learning and training objectives pursued with the internship.
The contract has to be signed; electronic form is not permitted (sentence 2 of Section 2 (1a) in conjunction with sentence 3 of Section 1 of the NachwG). This means that "documentation" by e-mail which is common in practice is no longer sufficient.
How do internships have to be remunerated?
If the remuneration of the internship is to take advantage of the exceptions provided for in the MiLoG and is to be lower than the statutory minimum wage, it is recommended that the contract also includes a description of the internship and a provision requiring the presentation of certain specific documentary evidence (matriculation certificate, etc.).
In view of the requirements of the NachwG and the MiLoG, particular attention should be paid to formulating the learning and training objectives pursued with the internship. As of 1 January 2015, for example, interns over the age of eighteen have to be paid the statutory gross minimum wage which is currently EUR 8.50 "per hour of time" (cf. our article "Does the German Minimum Wage Act mean new rules for remuneration for on-call times?"). Exempted from this according to sentence 2 of Section 22 (1) of the MiLoG are
- "mandatory interns" (who are obliged to complete an internship based on university regulations, training regulations or in the context of training at a regulated vocational academy),
- "orientation internships" (of up to three months) or
- subject to strict requirements, “sandwich course” internships (only the first internship with a specific employer and only for up to three months).
Does anything special apply for foreign interns?
In the case of foreign interns, a valid residence permit also has to be presented to avoid sanctions such as fines of up to EUR 500,000.00. Although the (valid) student residence permit of a foreign student doing a mandatory internship at a German university is sufficient (a copy of which should be requested to be on the safe side), additional documentation is above all required for three-month internships done by students attending foreign universities. In this case, a Schengen visa normally has to be submitted. An appropriate national residence permit is required for longer internships.
In order to satisfy supervisory authorities of compliance with the statutory requirements of the NachwG, the MiLoG and, if applicable, residency regulations, employers or bodies offering internships must adjust their practices regarding the recording of employment conditions, remuneration and standard contracts. Company processes should be reviewed accordingly, and the standard templates used so far should be updated.
Any questions? Please contact: Angelika Schmid
Practice Group: Employment & Pensions