Construction companies looking for work in Germany need to register at SOKA-BAU Fund. This needs to be done before starting the business activity. Find out why the registration process is necessary, how it works and also what benefits it offers! If you have the education and knowledge in construction, you can open a construction company in Slovenia and post your workers to work in other EU countries!
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Construction in Germany
Construction is mostly done on the field, often also outside the borders of the employer’s country of establishment. Due to its geographical proximity, developed market and high demand many Slovenian construction companies are looking for work in Germany. When entering the German labor market, Slovenian employers face obligations such as respect for the minimum wage in construction and the payment of workers’ leave contributions.
The construction industry in Germany was the first to have a minimum wage in place. Previously, posted workers’ wages and working conditions depended on the country of origin. Collective Agreement for the Regulation of the Minimum Wage in Construction in Germany protects construction workers posted to Germany.
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Posted workers in construction companies: what rights do they have?
Where the employer is posting his employees to work outside the country in which he is established, the employer exercises his freedom to provide services. Posted workers are protected by the Posting of Workers Directive (EU Directive 2018/957 amending Directive 96/71), which lays down the same rules on remuneration as for domestic workers of the host Country and regulates the period after which the employment law of the host country applies.
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What is SOKA-BAU?
SOKA-BAU is the umbrella name of two German parity funds for the construction industry:
- ULAK (fund for the payment of annual leave and wage allowances for construction workers) and
- ZVK (supplementary pension fund for the construction industry).
Slovenian construction companies working in real estate in Germany must register with the SOKA-BAU Fund before starting the work. Companies need to pay holiday contributions for posted construction industry workers. The contribution for the employer to the SOKA-BAU Fund is given as a percentage of the gross working hours carried out on the construction site in Germany. For 2020, the contribution amount is 15.40% of gross working hours.
The fund shall be paid contributions for workers who are directly physically active on a construction site in Germany. However, workers working in an office, control, and planning work are an exception. If companies established abroad and engaged in construction activity in Germany already pay holiday contributions to a similar fund in their home country, they do not need to pay in SOKA-BAU.
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Acquisition of SOKA-BAU number
The Slovenian company fulfills its duty to register with the fund by completing the questionnaire and getting its SOKA-BAU number, for which it must meet certain conditions.
What benefits does SOKA-BAU provide for workers?
The SOKA-BAU Fund allows workers to add up unused leave from different employers and can benefit from their last employer, where they have a contract of employment. Even in the event of termination of the employment relationship, even if the worker has not been active in Germany for the last three months, SOKA-BAU shall pay him unused leave for the previous and the current year. In a calendar year, the worker has 30 days of leave. The rule states that a worker has 1 day of leave every 12 working days.
Employer’s obligations after registration in SOKA-BAU
After the initial registrations are complete, the employer must keep records on a regular basis and to report the hours of the presence of each worker at construction sites in Germany. It must also send monthly gross earnings reports of all construction workers to the fund by e-mails or original forms. In doing so, the employer must indicate the exact amount of salary paid, which must correspond at least to the minimum wage established under the collective agreement.
The employer must forward the monthly report for SOKA-BAU no later than 15. of the month for the previous month. Companied need to pay contributions to the Fund by 20. in the month for the previous month, into the bank account of the SOKA-BAU Fund.
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