Unfortunately, if you start working in Germany, you can't simply cross the border with your staff. You first need to arrange a few things. You must comply with both general regulations and construction-specific regulations. We'll explain this in more detail in a series of blog posts. In the previous blog post, we explained why, as a Dutch construction employer, you must pay the German statutory minimum wage in Germany. This blog post is about SOKA BAU's holiday allowance fund.
If your company is based in the Netherlands and you're going to carry out construction work in Germany with Dutch personnel, you'll be treated similarly to German companies in several respects. This means, among other things, that you must pay the German statutory minimum wage . You're also required to participate in the German holiday allowance fund (ULAK), which is managed by the Social Fund for the Construction Industry (Sozialkassen der Bauwirtschaft or SOKA BAU).
In the Netherlands, we typically pay out holiday pay once a year (usually in May). This holiday pay usually amounts to 8% of the gross salary. In addition, you continue to pay the employee's salary if they take vacation days.
In Germany, things work differently: here, you pay a monthly contribution to the ULAK for vacation entitlements (30 vacation days per year) and vacation pay. In 2024, this contribution was 15.4% of the gross hourly wage. When the employee takes vacation days, the ULAK pays you the amount for the relevant vacation entitlement, allowing you to continue paying their salary. The employee then receives a 25% surcharge on the compensation for the vacation days taken.
Your construction company is required to participate in the ULAK if the following conditions are met:
In this case, you must register your staff with SOKA BAU yourself. Watch this video:
As soon as your company or an individual employee's activities in Germany cease, you must deregister the employee(s) with SOKA BAU.
In principle, you do not need to register personnel to whom you have delegated construction supervision (UTA personnel) and who do not perform physical work with SOKA BAU. The same applies to personnel who perform planning, administrative, and office tasks.
Does your company perform physical work for more than 50% of its working hours? Then the entire company is subject to SOKA BAU. For office staff, you don't pay a percentage of the gross hourly wage; instead, you pay a fixed amount.
If you work in a specific sector, you may be eligible for an exemption from the SOKA BAU levy. This is the case if a different collective labor agreement applies to your sector, which does not stipulate payment to the ULAK (Unintelligible Building Allowance), such as roofers, scaffolders, certain painting companies, carpentry firms, and the installation sector. Feel free to contact us if you're curious whether you might be eligible for an exemption.
Do you want to work in Germany with your Dutch construction staff? Do you have questions about your (registration with) SOKA BAU? Then you can, of course, contact Heisterborg International. Our team of employment law and HR specialists is fully bilingual and well-versed in German employment law.
You can also choose to use Heisterborg International as your external HR department for your German operations. We'll take care of everything for you, allowing you to focus on what you do best: running your business.
Please feel free to inquire about what we can do for you.
