🧭 Small employer: overview
In brief
As soon as you employ someone, you are an employer. This also applies to small businesses, family businesses and private households, for example when you have a home help.
These duties almost always apply:
- You give a written record of the most important contract terms.
- You pay at least the minimum wage (2026: €13.90 per hour; from 1 January 2027: €14.60).
- You register the person with social insurance.
- You grant leave and keep paying wages for up to six weeks during sickness.
- You register the business with the Berufsgenossenschaft (employers' liability insurance association).
There are fixed rules for dismissal, fixed-term contracts and working time. Small businesses sometimes get relief here. The pages in this module guide you step by step.
Scope: You will find employees' rights in the Employees module. Questions on the Handwerksordnung (crafts regulation), contracts for work and construction sites are covered in the Craftspeople module.
Step by step
- Clarify the type of employmentFull-time, part-time, mini-job, midi-job or private household: registration routes and contributions depend on this.
- Contract and written recordDraw up and hand over a written record of the essential terms.
- RegisterRegister with social insurance and accident insurance, immediately in certain sectors.
- Ongoing dutiesObserve minimum wage, leave, sickness, working time, data protection and occupational safety.
Deadlines
- Anyone who does not pay the minimum wage commits an administrative offence under the MiLoG and risks a fine of up to €500,000 (§ 21 MiLoG). This is not "undeclared work" within the meaning of the SchwarzArbG; the two must be considered separately.
- A private household is also an employer, with all the basic duties.
- Help from a spouse or children may be subject to social insurance contributions.
- Thresholds depend on how employees are counted; part-time staff count proportionally.
In depth · legal basis, figures and practice – for advisers and professionals
Who is an employer?
An employer is anyone who employs employees. Size does not matter. Many rules (Nachweisgesetz, minimum wage, Bundesurlaubsgesetz, continued pay during sickness) apply from the first employee.
Thresholds
Some duties and protective rules depend on the number of employees. Examples from the sources checked: protection against dismissal under the first section of the KSchG does not apply, under § 23 Abs. 1, in businesses with "as a rule five or fewer" employees (sentence 2), and for employment relationships from 1 January 2004 not in businesses with "ten or fewer" (sentence 3); part-time employees count as 0.5 (up to 20 hours) or 0.75 (up to 30 hours). Works councils are elected under § 1 BetrVG from "at least five permanent employees entitled to vote, of whom three are eligible for election". A data protection officer is required under § 38 Abs. 1 BDSG from "as a rule at least 20 persons" who are permanently engaged in automated data processing. The levy U1 applies under § 1 Abs. 1 AAG to employers with as a rule no more than 30 employees excluding trainees; the determination under § 3 AAG counts part-time staff as 0.25, 0.5 and 0.75 and thus differs from the Kündigungsschutzgesetz (which uses 0.5 and 0.75).
Scope
This module is addressed to employers. The Employees module explains the same rules from the employees' point of view. Sector-specific crafts law (master craftsperson requirement, contract for work, construction site law) is in the Craftspeople module.
A question about your situation that this page does not answer? Write to us or use the contact form – we will tell you which office is responsible and what to bring. Free of charge, without individual legal advice.