What are the new government’s plans for labour law? What changes relevant to HR are in the coalition agreement? Without claiming to be exhaustive, the main plans from the coalition agreement are summarised below.
Labour Law
Minimum wage: The statutory minimum wage is to rise to €15 by 2026. It says: “We are sticking to a strong and independent minimum wage commission. For the further development of the minimum wage, the Minimum Wage Commission will be guided by both the development of collective agreements and 60 percent of the gross median wage of full-time employees as part of an overall assessment. In this way, a minimum wage of 15 euros in 2026 is achievable. ” – The obvious contradiction between an “independent” minimum wage commission and the immediately following orientation guidelines for it has either not been noticed by anyone or is being accepted.
Collective bargaining: In order to strengthen collective bargaining, a federal collective bargaining law will be introduced, which will apply to public contracts from €50,000. It also states: “Collectively agreed wages must become the rule again“.
Flexibilisation and recording of working hours: In future, the Working Hours Act is to permit a weekly maximum working time instead of a daily maximum and trust-based working hours are to continue to be possible – in line with the EU Working Time Directive. It will certainly be interesting to see how this is structured.
Co-determination and digitalisation: In future, works council meetings and works assemblies should also be permitted virtually as an equivalent alternative. In addition, the possibility of online works council elections is to be enshrined in the Works Constitution Act . Trade unions will be granted a digital right of access to companies, in line with their previous analogue right of access.
Overtime: Supplements for overtime are to become tax-free, whereby the limit for full-time work within the framework of collectively agreed regulations is to be 34 hours and 40 hours for working hours not covered by collective agreements.
This is likely to lead to conflicts and delimitation difficulties. Furthermore, the question arises as to whether, from the government’s point of view, a 34-hour week should become the new standard in future (leaving aside whether and to what extent the country can or wants to afford this in global competition).
Use of artificial intelligence: When using AI in companies, both the qualification of employees and “fair regulations” for the handling of employee data should be ensured . Co-determination in this regard is to be “further developed”
It will be interesting to see what happens here; the wording so far at least does not suggest that the negotiators are particularly close to the facts in this area.
Promoting trade union membership: Trade union membership is to become more attractive. Tax incentives for trade union members are planned in order to effectively reduce their membership fees and thus increase the level of organisation.
State-subsidised trade union membership should certainly please trade unions, which are suffering from a loss of members and resignations.
Reducing bureaucracy in labour law: Written form requirements will be reduced in order to simplify procedures. In particular, the statutory written form requirement for employment contracts (e.g. also for fixed-term employment relationships), where it still exists, will be cancelled so that digital contracts can be concluded with legal effect.
Fixed-term employment law (TzBfG): The Part-Time and Fixed-Term Employment Act is being amended in order to relax the ban on subsequent employment in certain cases of fixed-term employment without objective grounds. In future, employment relationships during a course of study will be exempt from the prohibition on subsequent employment. In addition, the prohibition on subsequent employment will be lifted to allow pensioners to continue working for their previous employer for a limited period after reaching the standard retirement age.
This will make it easier to continue working voluntarily beyond the age limit, which was previously done, if at all, via temporary employment.
Status determination procedure: In order to avoid bogus self-employment, the social security status determination procedure will be fundamentally reformed.
Unfortunately, the coalition agreement is not yet more precise.
Commuter allowance: The commuter allowance for commuters will be increased to 38 cents from the first kilometre on 1 January 2026 and then permanently fixed at this level.
Immigration of skilled labour
Central immigration agency: A new digital agency for skilled labour immigration (“work-and-stay agency“) will be created . This is to serve as a central IT platform and single point of contact for foreign skilled workers. With the cooperation of the Federal Employment Agency, the agency bundles and accelerates all procedures for labour migration and the recognition of foreign professional and academic qualifications. The involvement of employers in the immigration process is to be improved in order to make procedures more practical. Bureaucratic hurdles in the recognition of foreign qualifications are to be reduced through consistent digitalisation and centralisation of procedures. The aim is to complete recognition procedures within 8 weeks . An ad-hoc federal-state working group will propose measures in the near future.
The fact that there is an urgent need for reform in this area and that the procedures must be accelerated is obvious and a permanent problem for all affected companies and HR or relocation employees. The extent to which this can be achieved by creating further working groups and agencies is doubtful – also in view of the experience of previous governments. Ultimately, each individual immigration authority would also have to be given standardised and binding (time) guidelines for processing cases, assigning deadlines, etc. or, if necessary, a genuine “fast-track” procedure would have to be created. None of this is included in the coalition agreement, so it is to be feared that there will be little change to the practical problems of the sometimes encrusted authority structures. However, exceptions prove the rule and hope dies last.
Refugees and the labour market: Barriers for refugees to access the labour market are to be removed. In particular, work bans will be limited to a maximum of three months, after which employment will be permitted. (Asylum seekers from safe countries of origin, Dublin cases and people who are clearly abusing the right of asylum are exempt from this rule). In addition, the rapid and sustainable integration of refugees into the labour market is to be promoted – for example through early recognition of qualifications acquired in their home country, language acquisition alongside work and tailored further training opportunities.
Conclusion
Without getting too political at this point, the SPD’s signature is clearly recognisable in this area of the coalition agreement. Although the implementation of individual legislative proposals naturally remains to be seen, the coalition agreement at least does not indicate any major reform of labour law, even if some things, such as weekly working hours, are a step in the right direction – one could also say: finally arriving in the long-standing reality.
For further information, please contact:
Benjamin Karcher, Bird & Bird
benjamin.karcher@twobirds.com
