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German Whistleblower Protection Act will Be in Effect Starting July 2023

Jun 27, 23 • ComplianceNo Comments
German Whistleblower Protection Act will Be in Effect Starting July 2023

After a slight delay and minor issues in the legislative process, the Whistleblower Protection Act is now on its way. Starting July 2023, the mandates of the European Whistleblower Directive (Directive (EU) 2019/1937) will be implemented in Germany as well, necessitating prompt action from numerous organizations.

Whistleblowers should be protected

To encourage whistleblowers to report potential violations or related suspicions without fear of reprisal, the proposed Whistleblower Protection Act aims to grant them appropriate protection.

Companies must establish appropriate reporting channels for this purpose. However, as initially planned, there will be no obligation to provide anonymous reporting channels. This also eliminates the requirement to follow up on anonymous tips, even if such channels are made available.

The establishment of anonymous reporting channels is still highly recommended for minimizing the risk of reports made to external bodies, such as the Federal Office of Justice. This approach ideally allows for violations to be addressed internally, without attracting significant public attention.

The scope of the law covers employees who report concerns involving their employer or another entity with which they have professional contact. The fines for these offenses can be as high as 50,000 euros. Examples of such violations may include hindering communication between the whistleblower and the reporting office, imposing sanctions on whistleblowers or breaching the confidentiality of the whistleblower’s personal information.

Swift entry into force poses challenges for companies

Following its promulgation in June 2023, the law will come into force at the beginning of July and will immediately oblige thousands of companies. As a result, companies with 250 or more employees must now comply with the requirements of the Whistleblower Protection Act within one month. For companies employing between 50 and 249 individuals, an extended implementation period until December 17, 2023 applies.

Companies that already have a well-integrated system are in a fortunate position, as they can approach the upcoming legislation with ease. If you require assistance, feel free to contact our experts at any time.
WINHELLER provides consulting and support on the implementation of an efficient whistleblowing system, taking into account relevant training requirements. We also serve as an ombudsman for incoming tips and, upon request, offer a customized digital solution for your whistleblowing system needs.

Continue reading:
Whistleblower System And Ombudsperson in Germany
Group-Wide Introduction of A Compliance Management System in Germany: A Legality Obligation of Parent Companies For Their Subsidiaries?

Stefan Winheller

Attorney Stefan Winheller has specialized in tax law for about 20 years, especially in the areas of cryptocurrencies, foundations/nonprofits and international tax law.

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