Overview
This article explains how to determine the number of employees relevant for the LkSG – including within a group.
Relevant for companies and groups checking whether they reach the threshold of 1,000 employees in Germany.
Counting within a group
For affiliated companies (Section 15 German Stock Corporation Act), the employees in Germany of all group companies are attributed to the parent company (Section 1 (3) LkSG). This also applies to pure financial holding companies.
Counting is done “bottom-up”: employees of subsidiaries and sub-subsidiaries are added to the parent company. Conversely, employees of the parent company and of sister companies do not count towards the subsidiary.
Employees posted abroad are included.
Who counts as an employee?
The general definition of employee under Section 611a German Civil Code applies. Part-time and full-time employees are counted equally. The decisive figure is the number of employees “usually” employed.
Included:
employees posted abroad
temporary agency workers at the hiring company if the assignment exceeds six months (Section 1 (2) LkSG)
senior executives
employees on probation, home workers, employees on short-time work and on maternity leave, and employed commercial agents
Not included:
temporary agency workers with an assignment of six months or less
freelancers and self-employed persons
members of governing bodies of legal entities
as a rule, shareholders of legal entities (exception: they also work in the company as employees)
persons whose main obligations under the employment relationship are suspended for more than six months in the financial year (e.g. passive phase of partial retirement, parental leave)
civil servants and soldiers
trainees, retrainees under the Vocational Training Act, interns and volunteers
Note: Individual cases can be complex. Agree on the counting method with your HR and legal departments.
Next steps
Involve HR and raise awareness of the LkSG requirements
Determine and document the relevant number of employees per company and for the group
Review the figure regularly, e.g. after acquisitions, restructuring or strong headcount growth
Further information