Digital employment contracts: What will change from 2025?

In the past, employment contracts could also be concluded without any formal requirements. For example, verbal employment contracts or contracts concluded by email were possible, but not the rule. This was contrary to the requirements of the German Act on Evidence (NachwG). This law previously obliged employers to record the central contractual terms of an employment relationship in writing, signed by the employee and handed over to the employee in paper form. This strict obligation to provide evidence also applied to subsequent amendments or additions to the contractual conditions.

In particular, because violations of these written form requirements are considered an administrative offense and can be punished with severe fines, they are associated with a great deal of additional work.

The core of the latest reform is the amendment to the Evidence Act. Since the Bureaucracy Relief Act IV came into force on January 1, 2025, it has been sufficient to provide evidence of the main contractual terms and any amendments in text form. The strict written form requirement with a handwritten signature is therefore no longer applicable.

In business practice, this means that the terms of the employment contract can be drawn up in text form and sent to the employee electronically. This means that emails and scanned documents, for example, satisfy the form requirement. A qualified electronic signature, often associated with a complicated authentication procedure, is also not necessary.

However, this requires that the document is made available to the employee (e.g. by email) and that he or she is able to save and print it. The appropriate technical precautions must be taken for this. The employee should also be asked to provide the employer with proof of receipt as part of the transmission. It is advisable for companies that want to use digital employment contracts to include the request to provide proof of receipt in the standard process.

The formal simplifications do not only apply to new employment contracts; amendments or additions to existing employment contracts are also covered by the change in the law.

There has also been a change in the area of temporary work. The Temporary Employment Act now stipulates that the text form is sufficient for temporary employment agreements between hirers and lenders.

However, the changes do not apply to all sectors of the economy. Sectors that are explicitly listed in Section 2a of the Act to Combat Clandestine Employment remain excluded from the possibility of digital employment contracts. Employment contracts in companies in these sectors must continue to be drawn up in writing, i.e. with a handwritten signature, and handed out in paper form.

Exceptions also apply to companies that are subject to a collective agreement that generally stipulates strict written form requirements. Existing employment contracts themselves may also contain strict formal requirements for amendments or additions, to which employers are then still bound. It is advisable to adapt the written form clauses in existing and model employment contracts accordingly if you wish to make use of digital employment contracts in the future.

Irrespective of the sector, employees have the right to additionally request a written record of the essential terms of the contract from the employer.

There is a differentiation in the case of fixed-term employment relationships. Here, the simplification of the formal requirements only applies to age limit agreements, i.e. if the fixed term is an agreement to terminate the employment relationship upon reaching the standard retirement age. For all other cases of fixed-term contracts, the written form requirement continues to apply.

Similarly, the agreement of a post-contractual non-competition clause is only possible in writing. The formal simplification also does not apply to the termination of employment contracts by means of notice of termination or a termination agreement - the written form requirement still applies here.

The amendment to the law includes some simplifications, but still contains many exceptions and therefore cannot be considered a major step towards reducing bureaucracy. As the exceptions affect large professional sectors such as construction, catering, security, passenger transport and transportation, the scope of the amendment is very limited. Companies must therefore carefully check whether digital employment contracts are possible for their sector from this year onwards. We will be happy to help you with this and provide you with comprehensive advice on your options.