Update on digitalization: Employment contracts by email from January 1, 2025

Apart from the other regulations, a number of written form requirements under labor law will be replaced by text form, e.g. email. This update provides an overview of which processes in HR departments can be digitized in the future – and which cannot. 

Changes to the Confirmation Act (“Nachweisgesetz”)

Already under current legislation it is possible to conclude employment contracts by email or DocuSign, if there are no legal formal requirements, such as, for example, with fixed term contracts. However, the Confirmation Act requires the employer to confirm the essential contractual conditions with a wet ink signature. The same applies to changes in essential contractual conditions. Confirmation by email or DocuSign is not possible. Violations can be punished with a fine of up to €2,000 (see our Update on the new version of the Confirmation Act 2022).

From January 1, 2025, the aforesaid confirmation can also be provided in text form, i.e. by email, under the following conditions:

• The document is accessible, storable and printable for the employee.
• The employer requests a proof of receipt when the confirmation is sent.
• The notification is sent individually to the employee; a general announcement is not sufficient.

The employee can still request wet ink confirmation, which must then be provided without undue delay. Failure to provide such written confirmation can result in a fine of up to €2,000. However, it is unlikely that employees who have already received written confirmation in text form will insist on receiving a wet ink signed confirmation as well.

Practical tip: The obligation to provide the confirmation separately does not apply, if the essential terms and conditions of employment are set out in an employment contract concluded by email or even in writing.

Economic sectors according to section 2a of the Act to Combat Clandestine Employment (“Schwarzarbeitsbekämpfungsgesetz”) are excluded from the simplifications, e.g. the construction, restaurant and accommodation sectors as well as the transport and logistics industries.

Continuing written form requirements and retirement entry clauses

Despite these simplifications, caution is still required in the following cases:

• Terminations and severance agreements continue to require the original wet ink signature of the employer, section 623 of the German Civil Code.
• Fixed term employment in contracts also continue to require the wet ink signatures of employer and employee, Section 14 (4) of the German Part-Time and Fixed-Term Employment Contracts Act (“Teilzeit- und Befristungsgesetz“). The same applies to trainee contracts and post-contractual non-competition clauses.
• The Fourth Bureaucracy Relief Act does provide some relief for agreements to automatically terminate the employment relationship upon reaching the standard retirement age. In the past, such agreements were not binding on the employee, if they were not agreed with  wet ink signature. From January 1, 2025, the contractual retirement age can also be agreed in text form, Section 41 (2) of the Sixth Book of the German Social Security Code (“SGB VI”). 

Practical tip: The contractual postponement of retirement beyond the standard retirement age will require wet ink signature.

• Despite the relief from wet ink confirmation under the Confirmation Act, amending contracts by email could be invalid under civil law due to contractually agreed written form clauses. In this case, it should be assessed whether the working condition amendment qualifies as so-called individual agreement that is effective regardless of such clauses or whether the written form has been implicitly waived in individual cases in accordance with Section 127 (2) German Civil Code.

Changes to other legislation acts

• Pursuant to Section 12 (1) of the German Temporary Employment Act (“AÜG”), text form will be sufficient for transfer agreements between the labour leasing agency and the hirer (i.e. also by email, for example).
• With the employee's consent, employment reference letters can be provided in electronic form. Unlike with the text form, an email is not sufficient for this.
• The Working Hours Act (“ArbZG”) and the Youth Employment Protection Act (“Jugendarbeitsschutzgesetz“) previously had to be “displayed or posted” in the company (Section 16 (1) Working Time Act). In the future, the publication of the regulations on the company's intranet will be permitted.
• Employees can request parental leave by email in accordance with Section 16 (1) of the Federal Parental Allowance and Parental Leave Act.
• The same applies to requests for part-time work during parental leave under Section 15 Federal Parental Allowance and Parental Leave Act, as does the rejection of a request for part-time work by the employer.
• In the future, an email will also be sufficient to apply for care leave under the Care Leave Act (“Pflegezeitgesetz”) and for family care leave under the Family Care Leave Act (“Familienpflegezeitgesetz“).

Prospect and recommendations

The Fourth Bureaucracy Relief Act offers companies in almost all sectors an opportunity to review their internal processes for onboarding employees and temporary workers and to free themselves, at least to some extent, from the hassle of paperwork. The same applies to the documentation of amendment agreements, unless the employment contract requires the written form. In most cases, these can now be agreed with legal certainty by email. In particular companies whose HR processes are managed from abroad will benefit. Company IT should be checked to see whether digital documents can be created and changed quickly and efficiently.

It will however be important not to lose sight of the continued requirement for the written form in the case of fixed-term employment contracts, post-contractual non-competition clauses and in the case of terminations and severance agreements. Formal errors in this area will continue to result in the ineffectiveness of the measure. For employees who are close to retirement, consideration should be given to subsequently adjusting any invalid age limits in a suitable manner. 

We would be happy to help you optimize your processes by providing a legally compliant analysis of the potential and limits of current legislation and clear recommendations for action, right down to the individual procedural steps.