Changing or Losing Your Job in Germany

The stress of changing or losing your job in Germany is even worse when it’s in a foreign country. Quitting, being laid off, or changing jobs may require you to understand your rights and obligations to make the transition easier. This guide will provide you with step-by-step information on notice periods, resignation procedures, unemployment benefits, and residence permit requirements, so you can navigate each scenario with confidence. Important note: This guide applies only to employees, not freelancers.

If You Quit Your Job

   1. Determine Your Notice Period

Your employment contract has a notice period (Kündigungsfrist). If you want to leave, you have to work until the end of that notice period. The notice period starts when your employer receives your resignation letter. Notice periods in some jobs can be long – three months is common. If you want to leave earlier, you can agree on a shorter notice period with your employer.

   2. Resignation Letter

To officially quit, you have to give a resignation letter (Kündigungsschreiben). The notice period only begins when your employer receives this letter. Remember that your employer cannot force you to resign, so never hand in a resignation letter unless you have made that decision yourself.

   3. Consult a Doctor

If the reason for leaving is mental conditions, like burnout, depression, or stress, get a note from your doctor. The note will work as proof that you had a good reason for resigning. In the absence of a note from a doctor, it would be hard to prove that you quit for a justifiable reason. Also, you stand to lose three months’ unemployment benefits for quitting without reason.

If You Get Fired or Laid Off

 1. Understanding the Scenarios

• • Laid off: This occurs when your employer no longer requires your services due to financial issues or reduced workload.
  • Fired: This happens when your employer is dissatisfied with your work. In Germany, dismissal requires a valid reason except during the probation period. Employers must issue written warnings before firing an employee, unless the reason is very serious.

 2. How to Resist Unfair Termination

If you are fired after your probation period and believe the dismissal is unjustified, you have three weeks to challenge it by filing a Kündigungsschutzklage. Seek legal assistance for this process.

 3. Completing Your Notice Period

Even if you are dismissed, you are still entitled to continue working up to the end of your notice period and be paid for this period. This is the time during which your employer can insist you work or put you on garden leave. Unused holiday days may also be counted as part of your notice period. Some employees may have no notice period for dismissal if they have been guilty of misconduct.

 4. Negotiating Severance Pay

You can demand severance pay, known as Abfindung, when you are laid off. Usually, you are required to enter into a termination agreement (Abwicklungsvertrag) for you to be granted severance pay. The amount is mostly negotiated by multiplying 0.5 times your gross monthly income for every year of service. Thus, five years of service would grant 2.5 months’ worth of severance pay. A labor lawyer can help you negotiate better severance. Of course, excessive severance pay may disqualify you from unemployment and throw you out of the system for three months. Sometimes, it is beneficial to decline severance pay and apply for unemployment instead. If you are unsure, speak to an attorney.

 5. Don’t Sign an Aufhebungsvertrag

Your employer may offer you a termination agreement (Aufhebungsvertrag), which is a contract in which you agree to leave the company. Be very cautious about this since it is not always in your best interest.

a) Disadvantages of signing an Aufhebungsvertrag:

• • • • You waive your dismissal protection (Kündigungsschutz) and your right to sue your employer.
      • You may forfeit up to three months of unemployment benefits.

b) Advantages:

• • • • You can negotiate better severance pay.
      • You may quit work early before the normal notice period. This is especially useful if you have a new job lined up.

Before Quitting Work

  1. Enroll as an Unemployed Job Seeker

Once you realize you will lose your job, register as a job seeker with the Agentur für Arbeit. This is to be done three months before your last day at work or within three days of learning about your unemployment. Failure to register early may reduce the amount of your unemployment benefits.

  2. Notify the Ausländerbehörde

If you have a residence permit, you must report any change or loss of your job to the Ausländerbehörde within two weeks. Permanent residents are exempt from this requirement.

  3. Register as Unemployed

You must register at the Agentur für Arbeit in order to be eligible for unemployment benefits. You should do this during the last three months of your job.

  4. Inform Your Health Insurance Provider

Even during unemployment, the health insurance will continue to be active, but probably at a higher cost. A private insurance coverage will require shifting to public coverage if you receive unemployment benefits.

 5. Letter of Reference

A letter of reference (Arbeitszeugnis) documents your employment history and performance. It can be useful in your future job search. Request this letter in your resignation letter. Employers are legally obligated to provide it upon request.

There are two types of references:

• • Simple reference: Includes the duration of your employment and job description.
  • Qualified reference: Includes an evaluation of your performance and the reason for leaving.

  6. Obtain Other Essential Documents

Make sure you get the following documents:

• • • • Salary tax statement (Lohnsteuerbescheinigung)
      • Last pay slip (Gehaltsabrechnung)
      • Employment certificate (Arbeitsbescheinigung)
      • Vacation certificate (Urlaubsbescheinigung)

These documents are required to receive unemployment benefits and confirm your work history.

When You Are No Longer Working

  1. Training Opportunities

If you get unemployment benefits, you can be entitled to free professional training, coaching, or language courses from the Agentur für Arbeit. Ask about these during your appointment for unemployment benefits.

  2. Find New Work

You can get a new employment or even start your private business. Unterstützungsberechtigkeit may offer further financial support or entrepreneurial training support (Gründungszuschuss). All depends on how you are accepted to live according to your residence.

  3. Tax Declaration File

At year’s end file a tax declaration (Steuererklärung). Job application costs are tax allowed. Filing a tax declaration is compulsory by law if your unemployment benefits existed.

  4. Apply for Pension Refund

If you intend to leave Germany permanently, you can claim a refund of your pension contributions. Employees pay 9.3% of their salary to pension insurance, which may be refunded in specific circumstances.

Residence Permit Requirements

Always inform the Ausländerbehörde if you change or lose your job. Depending on the type of residence permit you have, different rules may apply. For example:

1. 1. Blue Card holders: After one year of employment, you are allowed to change jobs without any restrictions on salary.
   2. Opportunity card holders: You can work 20 hours per week, but full-time employment requires a different residence permit.
   3. Job seeker visa holders: You may need another residence permit before starting a new job.

Your family’s residence permits may also be affected if your status changes. Always consult the Ausländerbehörde for guidance.

It is very important to know what to do when you are leaving or losing your job in Germany. Quitting, getting laid off, or changing jobs are all processes that require guidelines to ensure that everything goes smoothly and your rights are protected.

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