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Legal changes in 2023

Companies face numerous political, social and economic challenges at the beginning of 2023. As in the past year, they are also entering "uncharted territory" in many legal respects. Some things are still under discussion, others are already being implemented. Read this article to find out what companies need to prepare for now.

Corporate due diligence in supply chains

Corporate responsibility for human rights and the environment does not end at the factory gate. To ensure compliance with human rights in global supply chains, legislators have therefore enacted the Supply Chain Duty of Care Act (LkSG), which will come into force on January 1, 2023. It obliges companies to identify risks throughout the supply chain, monitor them and establish suitable control mechanisms. It also requires the submission of a policy statement.

Initially, the obligations will only apply directly to companies with more than 3,000 employees, then from 2024 to companies with 1,000 or more employees. However, the due diligence obligations will also have an indirect impact on smaller companies if they are part of the supply chain of a directly obligated company.

In the meantime, a directive with even more far-reaching provisions has been presented at EU level, which is expected to be adopted in the course of the year and which German lawmakers will then have to implement in the next few years.

Relief packages for companies

The ongoing energy crisis and further increases in energy costs have prompted legislators to pass extensive relief packages for private individuals and businesses.

Part of the third relief package is a so-called electricity and gas price brake, which caps energy prices at 70 and 80% of the previous year's consumption respectively.

There is also easier access to short-time allowance until June 30, 2023. The scheme would actually have expired on December 31, 2022. Short-time allowances can still be paid out if at least 10% of employees are affected by a loss of pay.

Employers can also continue to pay their employees a tax- and social security-free inflation compensation premium of up to 3,000 Euros until December 31, 2024.

Temporary adjustment in insolvency law

To counteract a wave of insolvencies, temporary adjustments to insolvency law will apply until December 31, 2023. Among other things, the forecast period for the existence of over-indebtedness has been reduced from twelve to four months to enable companies to operate more "on sight" during a crisis. On the other hand, this entails higher default risks for their contractual partners. Companies should take this into account in their business dealings and agree sufficient collateral where necessary.

Labor and Employment law

From 2023, disability certificates for employees with statutory health insurance will only be transmitted digitally. This means that the so-called "yellow slip" will be a thing of the past. Employers will have to request the work disability certificates in the so-called eAU procedure from the health insurance companies, which will receive the data electronically from the doctor's office or hospital.

The additional earnings limits for early retirement pensions will be abolished. This will make the transition from working life to retirement more flexible. The so-called "midijob limit" was also increased to now 2,000 euros.

In addition, EU Directive (EU) 2019/1158 on reconciling family, care and work, which primarily provides for time off for the care of relatives, was transposed into German law. The resulting changes mainly affect leaves of absence for employees in small companies, as German law already largely complied with the directive in other respects.

Curbing the market power of digital companies

From May 2023, the so-called Digital Market Act (DMA) will become applicable, an EU regulation that provides for a code of conduct for digital companies. However, this will not lead to any major changes in Germany, as the ban on discriminating against other market participants was already introduced in this country in 2021 by the GWB Digitization Act. A second EU regulation, the Digital Services Act (DSA), will bring further innovations for online platforms. However, this will not take full effect until February 2024, as most of the regulations will not be applicable until then.

EU merger control

The EU Merger Control II Regulation (Foreign Subsidies Regulation) was adopted at the end of November 2022. However, this is only likely to have an impact on major company takeovers by companies from third countries that are not subject to strict EU state aid law, which may give them an advantage over EU companies.

Mobility, energy and environment

From January 1, 2023, only battery or fuel cell-powered vehicles will be subsidized with the environmental bonus of up to 4,500 euros and no longer so-called plug-in hybrids. From 01.09.2023, the subsidy for commercially used vehicles is to be discontinued altogether. The "Deutschlandticket" or "49-Euro-Ticket" as the successor to the "9-Euro-Ticket" is expected to be offered from May 2023.

Another change will result for the cost allocation of the CO2 tax for rental properties. For non-residential buildings, the legislator envisages that the costs of the so-called CO2 tax will be divided equally between landlord and tenant on a flat-rate basis. A phased model as for residential buildings is to be developed by the end of 2025.

From 2023, caterers will be obliged to offer reusable containers for food and beverages in addition to disposable containers. The law only provides for exceptions to this obligation for smaller catering establishments.

Some federal states have passed a so-called photovoltaic obligation. Accordingly, for new buildings or roof renovations, there may be an obligation to install and operate a photovoltaic system. Therefore, when planning new projects, the respective state legislation should be kept in mind.

Outlook: Whistleblower Protection Act, Conversion Directive, Battery Regulation and much more

In addition, further innovations have been announced for 2023:

The Whistleblower Protection Act is expected to be passed in the first quarter. Germany will thus implement the European Whistleblower Directive, which should actually have been transposed into national law by December 17, 2021. The aim is to strengthen the protection of whistleblowers, who until now have not been adequately protected against discrimination in the event of disclosures of wrongdoing in companies. Companies with at least 50 employees will be required to set up an internal reporting office. Companies with up to 249 employees will benefit from a simplification in that they will be allowed to set up a joint reporting office. Indications must be regularly followed up by internal investigations. Companies exceeding the thresholds should address the issue at an early stage, as the establishment of the reporting office may require the consent of the works council.

In addition, the Transformation Directive is to be transposed into national law. This contains requirements for cross-border mergers, demergers and changes of legal form of stock corporations, partnerships limited by shares ("KGaAs") and limited liability companies ("GmbHs") and should originally have been transposed into national law by January 31, 2023. However, an agreement in the Bundestag failed for the time being at the end of 2022.

In addition, the German Federal Ministry of Labor and Social Affairs has already announced that it will adapt the Working Time Act to the case law of the ECJ.

And the European Commission has also set itself ambitious plans. Among other things, it plans to make changes to the REACH chemicals directive, the battery regulation and further initiatives to reduce emissions and waste. To this end, the EU Commission has announced, among other things, a proposal for a "right to repair". Manufacturers are then to present repair options and the cost of spare parts more transparently to consumers and ensure that spare parts are standardized and available on a mandatory basis for a certain period of time.


We will keep you regularly informed about further developments here so that you always stay on top of things. If you have any questions about the topics covered, please feel free to contact us!

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