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Comment by tptacek | Hacker News Reader

German labor law has some features that might interact in interesting ways with startups.

Germany lacks employment-at-will; it appears that disputed terminations can easily become lawsuits there (but German law also seems to have orderly mechanisms for resolving these disputes, which boil down to mandatory severance).

German law has what appears to be a strict policy on hours worked per week and per day, and on working over weekends.

German law has statutory maternity leave (which I think is unproblematic) but also a statutory 3-year(!) parental leave, during which time employees aren't paid but are entitled to their job on return. Are startups exempt from this?

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On the at-will thing, in addition to it being easier if the company has demonstrable financial problems as someone else mentioned, one thing that makes it less of an issue is that usually when you start at a company in Germany you're given a fixed-term contract. It's only after your third contract (i.e. usually after two years) that you're required to get a permanent contract. In most cases if there's a real clash it's going to be sussed out in the first two years of employment, and during the first six months employees can be fired with no notice.

The working hours thing, for better or worse, is broadly ignored in software companies. That said, hours aren't as extreme as in many American companies.

For the parental leave, that only applies for companies with more than 15 employees, so the startups that it would affect are going to be more established. And while taking a year off is common, it's very rare for more to be taken with intent to return to the job.

I kind of wrote that comment with the expectation that you'd chime in and set me straight. Thanks! :)

> The working hours thing, for better or worse, is broadly ignored in software companies.

However, Germans at least take the idea of vacation time seriously

I'd argue that it's the other way around: Americans don't take vacation time very seriously.

Fixed term labor contracts can last for up to four years for startups, actually (whether chained or as a single contract). See §14 (2a) TzBfG. Whether you'll find employees willing to agree to this is a different question, of course.

Small companies (ten people or less) are exempt from some of these laws, but if a startup grows to a certain size it's not exempt.

They are, however, less of a problem for a startup then they may appear.

While a company can't easily fire employees who've been employed for many years, new employees who turn out not to be a good fit can be let go within 3 to 6 months.

Furthermore, it's much easier to fire people if your company is not making profit. A lot of the laws intend to protect jobs that would be cut to increase margins (e.g. outsourcing, hiring younger/cheaper workers, ageism, ...). If you can proof your company is financially in trouble, then this is enough reason to let employees go, and you don't have to proof they did something wrong.

Work hours, as required by law, are usually ignored by startups (though one could argue that this is not a good thing...).

Parental leave is a IMO a good thing, besides that career-driven employees who would want to work in a startup will not take a 3-year leave.

I will embrace each of the supposedly problematic things you mentioned in your post any day. They seem rather fair to me. Do you have a different opinion? Why would you want startups to be exempt from this?

I think he wants to make sure people know what they're in for when they leave the US to start a company. In the US, as soon as you pay someone a salary, you basically own them. You can work them 24 hours a day, 7 days a week, with no vacation or minimum wage. You don't have to provide benefits, and you can fire them for absolutely any reason at any time. You even own everything they do in their free time.

That's simply not the case anywhere else in the world, and it may be surprising to people from the US.

It sounds even more surprising to me even though I have never been to US. Although I always dreamt to...

Thanks for your post. I mean no disrespect, but could you please link to any references. Specially about the working hours, minimum wage and vacation etc. If it is true then I am going to do myself a favour and trash my US visa right away. I am not much of a traveller but I can always assume that grand canyon doesn't exist or that I can see it in a different life....

Edit: looks like you are right http://en.wikipedia.org/wiki/Working_time#United_States

Not visiting the US as a tourist due to the laws on salaried employees seems a bit short sighted.

I know it may sound illogical, but no decision is taken in isolation. Years ago I decided not to do anything with middle eastern countries for what they did to non-muslims, immigrants or to their own women. I still go fill gas in my car knowingly fully well how hypocritical it is, but I pray everyday for Elon Musk to succeed and for us to be off this hook. If US, a country made by immigrants, treats immigrants badly, thats enough for me to make a choice. It doesn't matter if it will have an impact or not. I really couldn't afford to care.... Having said that, if I were starving, I will go anywhere to make a living..and that really explains a lot of misery. I don't have any answers...sorry...

You are right, it is illogical indeed. Sorry. This is why I think every one should get a basic course in economics.

He's exaggerating somewhat.

Bear in mind that no one is forcing the employee to accept this. You can leave a job at any time, for any reason with absolutely no notice just as easily as the employer can get rid of you.

If I'm hired to work 40 hours/week for $100k year with 3 weeks vacation, I am entitled to all of that. If the employer then decides that I should work 80 hours a week and he will cut my pay to $60k/year and not let me take vacation, I can simply get up and leave and in most jurisdictions, that will be sufficient grounds for me to receive unemployment insurance while I look for my next job.

> Bear in mind that no one is forcing the employee to accept this.

That doesn't quite absolve the employer e.g. if I am stuck in sahara desert and bump into a man starving for days. At this time if I offer him food in return for his soul, would you consider it a fair trade? Even though the poor guy has a choice to reject my offer?

So, trading away one's soul might be considered short sighted and there's a whole argument to be had with regards to the state preventing us from making short sighted decisions, so lets say that the desert rescuer was demanding the starving life savings or something.

It would certainly be a horrible person who would demand that much for saving a person's life. But if the only reason that this or other person was holding rescue patrols in the desert was that they were hoping to strike it rich exploiting lost souls, then as a society we either ought to allow this or use taxpayer money to fund our own rescue patrols.

And remember that as a laborer you're not in anything like this situation. There's a lot of charity out there and though this won't make your life pleasant it will make you far better off than starving in the Sahara. And there is more than one potential employer out there bidding for your labor. And you can see that the system works because very few jobs only pay the minimum wage. If we were somehow to get into a situation where there was only a single employer in the country than I'd say that at that point some sort of government intervention might be called for.

>So, trading away one's soul might be considered short sighted

Starving to death instead of trading away your soul is more short-sighted; the metaphor has nothing to do with deferring pleasure or information asymmetry. It's about power asymmetry.

Being in a weak position while negotiating a deal doesn't imply either being less informed or having less self-control than the person on the other side.

Absolve him from what, exactly? A potential employer is in no way obligated to "give you a job." It is expected to be a fair trade of skill for pay. If you don't like the terms you're offered, you can go somewhere else.

nginx is having hiccups, let's try this again...

I'm not sure that everything you said is correct, but the beauty of at-will employment is that it allows most of these problems to be solved by people looking to their own best interests. I don't know many companies that would try anything like that because their entire workforce would likely just give notice and quit. That's not in anyone's best interest, so labor conditions (at least in reasonably in-demand fields) tend to be sane.

Of course, it's true that there are differences in the social contract you usually get working in the US compared to other places -- for instance, there is less expected vacation time here than in a lot of EU countries. But that's a tradeoff that people choose to make.

The entire workforce can give notice and quit in those conditions in Europe, with better unemployment insurance, free health insurance and much more chance of being able to extricate a financial settlement from their employer for unfair treatment.

I'm not saying nothing about at-will contracts filter down to benefit employees: US companies can often afford to pay higher salaries which on some occasions even correspond to higher hourly rates, and they can take more gambles on marginal job candidates. But it would be foolish to pretend it's a balanced tradeoff rather than a massive shift - fairly or otherwise - away from the interests of the median employee and towards the interests of the company.

Health insurance in Europe is not free; it's simply not managed by employers.

For example in the uk around 11/12% of your pay is national insurance paying for social security and the NHS.

Free in this context usually means free at the point of purchase (with contributions being based upon ability to contribute; which, in particular, means that for the unemployed it can be entirely free). Employers contributing is actually pretty common (see e.g. Germany or the UK). The key part is that healthcare is not contingent upon employment (or being able to pay for it independently).

At-will employment and salary basis are orthogonal issues. At-will is not a feature of overtime exemption.

No matter what kind of job you have, hourly or salaried, you can be severed at any time for no reason virtually anywhere in the US. At-will employment increases labor mobility and, very notably, makes entrepreneurship less risky by mitigating the problem of every termination being grounds for a lawsuit. At-will has social costs in other sectors where negotiating leverage isn't as balanced between buyers and sellers, but it is probably a significant net benefit for the tech sector.

The swap that is supposed to take place for salary-basis employees is that employees exchange their right to overtime pay for an assurance of full salary payment regardless of hours worked. If you dock an exempt worker's pay for leaving early or coming in late, they revert to overtime-eligible status; that's something that came up at a company I once worked for. Obviously, the other swap that salaried employees make is higher compensation; salaried employees out-earn non-exempt employees.

> German law has what appears to be a strict policy on hours worked per week and per day, and on working over weekends.

If it's anything like over here in The Netherlands (and I have no reason to believe otherwise), this will have very little interactions with startups: you simply work regular hours on paper, but simply make a lot of hours in the evenings / weekends at home.

Thats the way it works, usually. Lawsuits can happen, though, but I wouldn't exaggerate the risk.

Also, let me be quite open: if you hire someone for 40 hours and expect him to work more then 40 hours, don't be surprised if some come back and sue. You broke contract.

Are the German rules around labour hours any stricter than the EU Working Time Directive? Which applies here in the UK as well and which everyone (in my experience) simply opts out of:

http://en.wikipedia.org/wiki/Working_Time_Directive

At-will employment seemed like a terrible idea when I worked in the US, at least from the employees point of view. It's essentially enforced opt out of many protections you'd receive in other countries.

The only benefit to at-will employment for an employee is you're not tied into things like 'you must work here for 2 years / give 6 months notice', over/under of 15 years for those protections to start being weakened.

There's also the benefit that a company would be more willing to give you a chance at employment knowing they can fire you if it doesn't work out.

Well in Canada you can fire for no reason in the first 3 months anyway.

In Germany it is up to 6 months (Probezeit) depending on your contract. But the employee can also leave with 2 weeks notice.

Typically these laws would be biased towards the employee. At-will employment pretends there's some sort of symmetry and/or market forces. Social labour laws are about protecting employees, not employers.

Forcing someone to work for two years at a certain place or give 6 months notice before they leave would be considered a violation of their human rights in most places. I'd be really surprised if Germany requires employees to give 6 months notice before leaving...

It depends on your contract. The longest I ever had was 3 months to the end of a quarter. Theses conditons always go both ways. But which employer would insist in keeping you when he knows you want to leave? What level of motivation could he expect?

Many of these rules only come into affect once a company has reached a certain number of employees, which I think is around ten. So small start-ups should be fine, but will have to observe this once they start growing.

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