Contractual penalty in an employment contract – how high may it be?
Likely invalid — such a clause does not bind you.
Contractual penalty clauses in employment contracts are capped under BAG case law on § 307 BGB at typically one gross monthly salary and must name the offences concretely. Penalties without a clear cap or above one month's salary are void — the employer cannot enforce them.
What you can do next
Eine pauschale oder unbegrenzte Vertragsstrafe ist nicht durchsetzbar. Im Streitfall reduziert das Gericht die Strafe auf das zulässige Maß oder erklärt sie für unwirksam.
The law behind it
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Check the whole contractRelated questions
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- Shorter deadline for an unfair-dismissal claim in the contract – does it apply?
- What must an employment contract state under the Nachweisgesetz?
General information based on German law and court decisions, checked by lawyers — not legal advice for your individual case.