Foreign students: A solution for businesses in times of skills shortages?

published on 16 August 2024 | reading time approx. 3 minutes

Students are generally seen by employers as a flexible, cost-effective and future-oriented workforce. They bring with them not only up-to-date academic knowledge, but also the potential for long-term employment. The same applies to young people from abroad studying in Germany. The good news is that the number of international students, and therefore potential employees, is currently quite high. In the winter semester of 2023, around 370,000 international students were studying at German universities. According to the Federal Foreign Office, 76,156 German visas will be issued for the purpose of studying in 2023.

A residence permit issued for the purpose of studying in Germany entitles the holder to work under Section 16b of the Residence Act, but only to a limited extent. The latest amendment to the law, which came into force on 1 March 2024, increased the number of permitted working days from 120 or 240 half days to 140 working days or 280 half days.

The rationale behind this restriction is that students should be able to concentrate on their studies. This is also in line with the case law of the Federal Social Court and the practice of the social insurance institutions.

The new version of § 16b para. 3 of the Residence Act stipulates how part-time employment is to be counted. Foreign students have a choice: The employment can either be credited to the student's work account according to the 140/280 model pursuant to § 16b para. 3 no. 1 Residence Act or according to the so-called working student regulation pursuant to § 16b para. 3 No. 2 Residence Act. The choice does not have to be declared. The only thing that will be checked is whether the working day account would have been exceeded if the option had been used sensibly.

For the first model, the following must be taken into account: If foreign students work less than four hours in a day, the employment is counted as half a working day in the working day account. Breaks are not taken into account. If they work more than four hours, they are credited with a full working day.

At the same time, the law provides for the crediting of employment according to the so-called working student rule. According to this rule, employment can be counted as two and a half working days per calendar week, regardless of the distribution of working hours, if foreign students work either during the lecture period for up to 20 hours per week or outside the lecture period without a time limit. This means that the employment is notionally counted as two and a half working days. It does not matter how the hours are distributed over the week. Only the hours actually worked are relevant, not periods of leave or holidays.

It should be noted that part-time student jobs, such as student or research assistants, do not count towards the working day account.

Foreign students working in Germany are legally regarded as employees. This means that they are subject to the same labour laws as domestic employees. In particular, the employer has a duty of care to ensure that the working conditions comply with the law. Another important aspect is checking the foreign student's residence permit. The employer is obliged to check whether the student has a valid residence permit allowing him/her to work. Without such proof, the student may not be employed. There are also a number of social security issues to consider when employing foreign students.

Firstly, it should be noted that such employment is generally exempt from insurance if it is classified as marginal employment. According to § 8 para. 1 No. 1 SGB IV, a marginal job is one in which the remuneration does not regularly exceed the marginal income threshold. In addition, case law assumes that students remain exempt from health, nursing and unemployment insurance as long as their weekly working hours do not exceed 20 hours.

In practice, the question often arises as to how an employer can seamlessly continue to employ a foreign graduate after graduation.

Upon graduation, the foreign national loses his or her status as a student and must apply for a residence permit for employment purposes, such as the EU Blue Card. However, there is a problem: the application for a residence permit cannot be submitted until all the necessary documents have been submitted, in particular the documents confirming the completion of the studies. However, it may take some time before the foreigner receives the certificate and can submit the application. It may also take some time for the immigration authorities to check the documents and issue the residence permit.

If the foreign student and the employer agree to continue the employment relationship after completion of the degree program, it is recommended that an appointment be made with the relevant immigration authority well in advance of the university certificate being issued. Please note that the applicant must provide the immigration authorities with an employment contract or written confirmation from the employer. The employment contract may be concluded before the certificate is received and before the work permit is issued. However, it is recommended that the employment contract be concluded with the condition precedent that the employment will not commence until the above conditions are met.

In conclusion, foreign students can make a valuable contribution to the economic development of Germany. Although they are only allowed to work to a limited extent during their studies, they are an attractive option for employers as they have the potential to be employed on a full-time basis once they have completed their studies. However, there are a number of legal issues to consider when employing foreign students, both during and after their studies, and employers need to ensure that these are complied with.