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The main worry many foreign employers have regarding hiring in Germany is what happens if you have to fire the employee.
What happens depends very much on what kind of a legal setup you have. If you chose the route of the “virtual company” you will generally not have a problem. Most clients only have one or a few employees in Germany. As long as you have less than 10 employees, you have no problems firing an employee. You are deemed a small business (regardless of how many people you might have at headquarters).
Should you have to come to some agreement with the employee regarding severance payments there is a general rule of thumb that is applied in Germany: The company pays ½ a month’s salary severance for every full year the employee has been with the company. While there is no law stipulating this, this is what is commonly agreed in courts.
For most this will therefore not create a large cost factor.
We can guide you through the necessary steps to hiring and firing employees in Germany
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