Every foreign construction company is legally obliged to declare any and all work performed on German construction sites and register with the Central Customs Authority.

Companies from some Central or East European countries (CEE countries) need permission to perform contracts for services or work (so-called Assurance Certificates) and valid work permits before they can start working in Germany. These are issued by the Federal Employment Agency.

Assurance certificates for contractors of contracts for work or services from CEE countries are subject to contractors’ proper participation in the leave scheme. Such proper participation will also be assessed while contracts for work or services are performed. Any improper participation in the leave scheme may have the effect that no new assurance certificates will be granted and/or that work permits for ongoing contracts for work or services are revoked by the Federal Employment Agency.

Any and all work on construction sites in Germany also has to be registered with SOKA-BAU. The original employer’s master data and worker’s master data forms are to be completed and to be sent to SOKA-BAU. SOKA-BAU must immediately be informed in writing of any changes in the employer’s or worker’s master data.

SOKA-BAU also requires certificates proving that the employer’s company is registered at the place where his company is headquartered abroad (e.g. excerpts from the trade register, copy of trading licence or similar). This is the only way for SOKA-BAU to assess whether a company is obliged to participate in the German leave scheme. Further certificates have to be provided as well if any related registrations are made in Germany.

Employers have to submit an electronic report stating the exact amount of gross wages actually paid–  at least, however, the minimum wages according to the respective collective agreement. Employers can only be excluded from the electronic reporting procedure if they can prove that it causes them economic or personal hardship.

Employers are obliged to pay their workers a leave allowance if they take leave during their posting abroad. The leave allowance is 14.25% of all gross wages paid for the posted period until the time leave was granted. If an employer paid his workers a leave allowance for the leave granted during the posting period, the employer has to state the gross amount of such leave allowance and the number of vacation days taken in the respective monthly report. The amount of leave allowance paid must at least correspond to the minimum amount determined by collective agreement. Monthly reports have to be received by SOKA-BAU by the 15th of the following calendar month.

SOKA-BAU will calculate the employers’ entitlements for reimbursement on the basis of the data provided.