The coalition agreement and its impact on employment law

Many of the plans that have now been written into the coalition agreement were already part of the results of the “Labor & Social Affairs” working group. In addition to a planned reduction in bureaucracy, including the elimination of the written form requirement for fixed-term contracts or a more transparent status determination procedure for determining dependent or independent employment, the following key points have been included in the coalition paper:

Working hours - weekly instead of daily maximum working hours 

Working time models should be more flexible. Instead of the daily maximum working time, a weekly maximum working time is to apply in future - as already provided for in the European Working Time Directive. However, the coalition partners have not yet decided on the specific details. 

Electronic time recording and trust-based working hours without time recording

The obligation to record working hours electronically is to be regulated “unbureaucratically” in future. Appropriate transitional periods for small and medium-sized companies are also promised. Trust-based working hours are to remain possible without time recording “in line with the EU Working Time Directive”. Whether and how this can be implemented in accordance with EU law remains to be seen.

Tax concessions for overtime bonuses and working time bonuses

Bonuses for overtime that exceed the collectively agreed or collectively agreed full-time working hours are to be made tax-free. Part-time employees are not to be covered by this regulation. Whether this is permissible will have to be clarified in court in case of doubt. Employer bonuses are to be tax-privileged to encourage part-time employees to extend their working hours.

Minimum wage - 15 euros in future

The statutory minimum wage will continue to be set by the Minimum Wage Commission, but will in future be based on the development of collective wage agreements and 60 percent of the gross median wage for full-time employees. According to the future government, a minimum wage of 15 euros could be achieved in 2026. 

Securing the skilled labor base 

The shortage of skilled workers is to be counteracted by promoting the participation of women in the workforce, making it easier for retirees to return to their old employer and encouraging qualified immigration to Germany. A “work-and-stay agency” is to be created as a single point of contact for foreign skilled workers and processes are to be simplified with the involvement of the employer. 

Digitalization, AI and digital co-determination options

The coalition partners want to create the “right framework conditions” for the use of digitalization and AI in the world of work. At the same time, however, they are completely vague about what these could look like. Works council meetings, works assemblies and works council elections should also be possible “online” in future. 

Conclusion

On a positive note, it should be emphasized that working time recording in compliance with European law is finally to be tackled - however, it remains to be seen how and when this will actually be implemented. In this respect - as with the other projects announced - it is important to continue to monitor developments in order to be able to act when binding requirements are issued.