Virmondo EOREOR
DACH Compliance Specialists

DACH Compliance. Guaranteed.

German employment law has 47 ways to go wrong. We have mastered all of them so you do not have to.

AUG LicensedGDPR CompliantFull Liability Coverage
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The True Cost of Getting DACH Compliance Wrong

The DACH region has some of the world's strictest employment laws. Here is what is at stake.

Contractor Misclassification

EUR 500,000+ fines, back taxes, personal liability

Invalid Employment Contracts

Contracts void from day one without AUG license

Works Council Violations

Criminal charges for management

GDPR Data Breaches

EUR 20M or 4% global revenue fines

Termination Errors

12+ months back pay, reinstatement orders

Country-by-Country Compliance

Each DACH country has unique employment regulations. Here is what makes each one challenging.

47
Regulations
4wk-7mo
Notice Period
EUR 12.82/hr
Min Wage
Electronic Required
Time Tracking
Requirement
AUG License
Mandatory license from Bundesagentur fur Arbeit to employ staff for third parties. Without this, employment contracts are void.
18-Month Rule
Temporary workers must become permanent employees or leave after 18 months at the same client.
Works Council Rights
Companies with 5+ employees can form works councils with co-determination rights on hiring, firing, and working conditions.
Termination Protection
Employees with 6+ months tenure at companies with 10+ employees have full protection under the Kundigungsschutzgesetz.
Sick Leave
6 weeks full salary paid by employer, then Krankengeld from insurance (70% of gross, capped).
Vacation
Minimum 20 days for 5-day week (24 for 6-day). Industry standard is 25-30 days.
Working Time
Max 8 hours/day, can extend to 10 if averaged over 6 months. Electronic time recording mandatory since 2022.
Key Insight

Germany requires an AUG (Arbeitnehmeruberlassungsgesetz) license to legally employ workers for client companies. Operating without one makes all employment contracts void from day one.

98%
CBA Coverage
13th + 14th
Bonus Months
25 days
Min Vacation
Abfertigung
Severance
Requirement
Collective Bargaining Agreements
98% of employees are covered by CBAs. You must identify and apply the correct CBA or face back-pay claims.
13th & 14th Month Salary
Mandatory bonus payments (Urlaubsgeld and Weihnachtsgeld) that are tax-advantaged. Not optional.
Abfertigung (Severance)
Employers contribute 1.53% of gross salary monthly to employee severance fund. Employees keep this when leaving.
Working Time
Standard 40 hours/week, max 10 hours/day. Overtime premiums: 50% for regular overtime, 100% for Sundays/holidays.
Notice Periods
Employer notice: 6 weeks to 5 months based on tenure. Employee notice: typically 1 month.
Key Insight

Austria has near-universal collective bargaining agreement coverage (98%). Failing to identify and apply the correct CBA exposes you to back-pay claims for the difference.

26
Cantons
Required
Work Permits
Highest in EU
Avg Salary
Not in EU
EU Status
Requirement
Cantonal Variations
Each of 26 cantons has different tax rates, social security implementations, and employment practices.
Work Permits
Non-EU/EFTA nationals need L (short-term) or B (residence) permits. Process varies by canton and takes 4-12 weeks.
AHV/IV Contributions
State pension (AHV), disability (IV), and loss of earnings (EO) contributions total ~10.6% split between employer and employee.
BVG Pension
Mandatory occupational pension for salaries above CHF 22,050. Contributions increase with age.
Source Tax
Non-permanent residents pay Quellensteuer (withholding tax) that varies by canton, marital status, and income.
Key Insight

Switzerland is not in the EU, has 26 cantons with different rules, and requires work permits for non-EU nationals. Cantonal tax rates alone vary from 11% to 36%.

Everything We Handle. Nothing Left to Chance.

We manage every compliance requirement so you can focus on growing your DACH team.

Country-compliant employment contracts
Contracts drafted to meet German, Austrian, or Swiss requirements
CBA identification and application
Correct collective bargaining agreement identified and terms applied
Probation period compliance
Probation terms aligned with local maximums and notice requirements
Non-compete clause review
Restrictions reviewed for enforceability in jurisdiction
Working time documentation
Time tracking systems compliant with German electronic recording mandate
Amendment and addendum management
Contract changes documented and signed according to law
Gross-to-net calculations
Accurate deductions for social security, tax, and pension
Social security registration
Employee registered with health, pension, unemployment insurance
13th/14th month salary processing
Austrian mandatory bonus payments calculated and paid
Source tax withholding
Swiss Quellensteuer calculated by canton and withheld correctly
Expense reimbursement compliance
Business expenses processed per local tax-free thresholds
Year-end reporting
Annual tax certificates and social security reports submitted
AUG license maintenance (Germany)
Valid license from Bundesagentur fur Arbeit maintained
Works council coordination
Required consultations and information sharing completed
Work permit processing (Switzerland)
L/B permits obtained for non-EU nationals
Occupational health registration
Berufsgenossenschaft (Germany) or equivalent registered
Statutory insurance coverage
Required insurances (accident, liability) maintained
Regulatory change monitoring
Employment law changes tracked and contracts updated
Notice period calculation
Correct notice based on tenure, contract, and applicable CBA
Termination letter drafting
Legally compliant termination documentation
Works council consultation
Required consultation before termination in Germany
Final pay calculation
Accrued vacation, pro-rata bonus, severance computed correctly
Reference letter (Arbeitszeugnis)
Compliant employment reference per German requirements
Social security deregistration
Employee properly deregistered from all systems
GDPR-compliant data processing
Employee data processed per GDPR Article 6 basis
Data retention policies
Employment records retained and deleted per legal requirements
Employee data access requests
Subject access requests handled within 30-day deadline
Cross-border transfer compliance
Data transfers outside EU handled with appropriate safeguards

Full Liability. Zero on You.

As the Employer of Record, we are the legal employer. That means compliance responsibility rests with us, not you.

What This Means for You

When you use Virmondo EOR as your EOR in Germany, Austria, or Switzerland, we become the legal employer of your team members. All employment compliance obligations transfer to us.

Employment contract validity
We ensure all contracts are legally binding from day one
Payroll accuracy
Correct calculations, deductions, and timely payments
Tax and social security compliance
All statutory contributions filed and paid correctly
Regulatory adherence
AUG license, work permits, and registrations maintained

Our Compliance Infrastructure

In-house DACH legal expertise
Automated compliance monitoring
AUG license in Germany
Local payroll partnerships
Quarterly compliance audits

We Track Changes So You Do Not Have To

Employment law in Germany, Austria, and Switzerland changes constantly. Our compliance team monitors regulatory updates and proactively adjusts your employees' terms to stay compliant.

Recent Updates
Jan 2026|Minimum wage increase to EUR 12.82/hour
Dec 2025|Updated IT collective bargaining agreement salary bands
Nov 2025|New cantonal tax rates effective for 2026

Frequently Asked Questions

Common questions about DACH employment compliance and our EOR services.

As the legal employer, Virmondo EOR bears full responsibility for employment compliance. If an issue arises, our legal team handles it directly. We carry professional liability insurance and have never had a compliance violation result in fines for a client.

Yes. We hold a valid Arbeitnehmeruberlassungslizenz (AUG license) from the Bundesagentur fur Arbeit. This is mandatory for legally employing workers in Germany for client companies. Without this license, employment contracts would be void.

We automatically calculate and process the mandatory Urlaubsgeld (vacation bonus) and Weihnachtsgeld (Christmas bonus) payments. These are paid in June and November respectively, at the tax-advantaged rates required by Austrian law.

Yes. We handle the full work permit process for non-EU/EFTA nationals in Switzerland, including L permits (short-term) and B permits (residence). Processing times vary by canton, typically 4-12 weeks. We advise on the optimal permit type based on the role and duration.

The monthly fee covers: compliant employment contracts, payroll processing, tax withholding and filing, social security contributions, statutory insurance, time tracking compliance, regulatory monitoring, and dedicated account management. The only additional costs are the employee salary and mandatory benefits.

We specialize exclusively in the DACH region (Germany, Austria, Switzerland). While global EORs cover 150+ countries, we go deeper on DACH compliance. We have in-house German lawyers, direct AUG licensing, and local expertise that generalist providers cannot match.

We fully support entity transitions. When you are ready to establish your own German, Austrian, or Swiss entity, we help transfer employees cleanly. This includes TUPE-equivalent compliance in Germany, proper notice periods, and seamless payroll handover.

We focus on compliant employment through EOR. However, we can advise on contractor classification in DACH jurisdictions. If a role is at risk of misclassification, we recommend converting to employment through our EOR to avoid the EUR 500,000+ fines for Scheinselbststandigkeit (false self-employment).

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