If you send employees to Germany for construction work, you are obliged to register with the German vacation fund known Soka-Bau. How does this process work?
What is the Soka-Bau Fund?
Germany is specific in that the vacation entitlement of employees working in the construction industry operates on a different basis than in other industries. The specificity lies in the fact that the vacation entitlement is managed and administered by the German Soka-Bau Fund.
Purpose of the Soka-Bau vacation Fund
The German Vacation Fund was established to ensure that employees working in the construction industry do not lose their vacation entitlements. This can happen due to frequent job changes on construction sites or due to restrictions on working during the winter months. The main purpose is to ensure that employees have an equal entitlement for the vacation.
Registration with Soka-Bau
Every employer who performs construction activities in Germany is obliged to register himself and his employees with Soka-Bau.
The obligation to register applies to:
- employers who send employees to Germany for construction work,
- employees performing construction work in Germany (employees are registered with Soka-Bau by the employer).
Employers whose activities are not related to the construction industry (e.g. plumbing, electrical work, etc.) are freed from registration in the Soka-Bau Fund.
The process of registering with the Soka-Bau consists of the following steps:
The employer sends an application form to the Soka-Bau fund before starting the work in Germany. The application can be sent in 3 ways:
- electronically - to the email address email@example.com,
- electronically - via an online form,
- by post - to the address: SOKA-BAU, Urlaubs- und Lohnausgleichskasse der Bauwirtschaft (ULAK), Bereich Arbeitnehmer-Entsendeverfahren (AEV), Wettinerstraße 7, 65179 Wiesbaden, Germany.
- Soka-Bau will verify that the employer is indeed obliged to register and will then assign an employer number to use when communicating with him.
- The employer sends the relevant forms to the Soka-Bau for himself and for the employee.
- Soka-Bau will register the received information.
Employer's obligations after registration:
- To send the monthly electronic statement to Soka-Bau - no later than the 15th of the following month (Soka-Bau will check the monthly statement and calculate the employee's vacation entitlement),
- To pay contributions to the fund - no later than the 28th day of the following month.
Procedure for granting the employee's vacation while working in Germany
- will provide the employee with vacation,
- will pay the employee the compensations for vacation,
- report to the Soka-Bau the granted vacation in the following monthly statement.
- will check the monthly statement,
- will pay the employer for the paid compensations for vacation (if the employer has paid all contributions to the fund),
- will inform the employer and the employee about the balance of the vacation account.
Amount of contributions to the fund
The employer pay a contribution to the vacation fund on behalf of the employee in the amount of 15,20 % of the gross salary.
The employer is obliged to comply with the legal minimum wage in Germany for sent employees. This means that the sent employee cannot be paid less than the German minimum wage for the given year.
Further reporting obligations of the employer with the Soka-Bau
The employer is also obliged to inform Soka-Bau about:
- changes in the company's address,
- changes in legal form,
- changes in bank details,
- registration and deregistration of employees,
- deregistration of the trade,
- changes in the employee's address,
- employment of trainees.
Do you need help with registering with Soka-Bau? Contact us.
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