Deposit - worknow

EOR - Made in Germany.

worknow – Deposit Rules (EOR / Employee Leasing Deutschland)

(Legal & Process Details)

1. Purpose of the Deposit

worknow requires a refundable deposit to ensure the proper fulfilment of all statutory and contractual obligations arising from the employment relationship.

The deposit serves in particular to secure:

employee remuneration,
employer social security contributions,
payment of accrued but unused vacation upon termination,
statutory notice periods pursuant to Section 622 of the German Civil Code (BGB), which may exceed four weeks after six months of employment,
other legally required final settlement costs.

The deposit is not a fee, but a security deposit.

Vacation Payout (Germany)

Under German employment law, accrued but unused vacation does not expire upon termination of employment.
Any remaining vacation days must be financially compensated (vacation payout) as part of the final payroll.

Depending on the timing of termination and the employee’s accrued vacation balance, vacation payout may represent a material one-time settlement cost in addition to regular salary and social security contributions.

2. Standard Deposit Amount

The standard deposit amounts to 1.5 monthly total employment costs per assigned employee. Monthly total employment costs include:

the agreed gross salary,
employer social security contributions,
any fixed recurring compensation components.

3. Payment Logic (Important Clarification)

Clients pay the monthly salary on the 15th of each month, while worknow pays employee salaries at the end of the month (30th/31st).

Accordingly:

the deposit does not serve to pre-finance ongoing salaries,
it exclusively secures termination-related and settlement risks (notice period, vacation payout, final payroll).

4. Adjustment of the Deposit in Case of Increased Risk

The deposit may be adjusted if the financial settlement risk increases, in particular in cases of:

extended statutory or contractual notice periods (e.g. termination effective at quarter-end),
vacation entitlements exceeding the statutory minimum,
additional fixed compensation elements,
other circumstances leading to increased termination or settlement costs.

In such cases, the deposit may be increased up to a maximum of two monthly total employment costs, unless otherwise agreed.

5. Use of the Deposit

worknow is entitled to offset the deposit against outstanding claims, in particular: