Scope of application of the supply chain due diligence act for international corporations

From 2023, the new regulations on the Supply Chain Act will come into force in Germany. In consulting, there is now often contradictory information on the scope of application with regard to international groups and, in particular, whether employees of foreign subsidiaries must also be taken into account for the employee thresholds.

From 2023, the new regulations on the Supply Chain Act will come into force in Germany. In consulting, there is now often contradictory information on the scope of application with regard to international groups and, in particular, whether employees of foreign subsidiaries must also be taken into account for the employee thresholds.

In fact, a look should be taken directly at the wording of the law and here in § 1 para. 3:

Within affiliated companies (Section 15 of the German Stock Corporation Act), the employees of all group companies employed in Germany must be taken into account when calculating the number of employees (Paragraph 1 Sentence 1 No. 2) of the parent company; employees posted abroad are included.

It can be inferred from this wording that in fact only the employees employed in Germany are included. Thus, only the employees of subsidiaries must be taken into account if they are employed by domestic subsidiaries. The addition that employees posted abroad are also included is a further clarification that the law in principle only takes into account domestic subsidiaries with regard to employee thresholds, but not foreign ones.

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