Details of how Mrs Merkel’s new administration wants to be “Shaping Germany’s Future”

Almost three months after the general election, the biggest political parties CDU/CSU and SPD have agreed to form a joint administration under the lead of Chancellor Angela Merkel.

 In a 185-page coalition agreement named “Shaping Germany`s Future”  the parties have specified their plans and contemplated actions in respect of the forthcoming legislative period. In this post we will outline the key points relating to employment and labour issues that might be relevant to your business and your daily work. However, it remains to be seen if all of these projects will be implemented in the form described in the coalition deal. As always, we will keep you posted about any relevant developments.

  •  Minimum Wage

A nationwide minimum hourly wage (with very limited exceptions) of € 8.50 (£ 7.11; US$ 11.55) will come into force for the first time on January 1, 2015. The level of the minimum wage will be reviewed by a specific commission in regular intervals, for the first time with effect to January 1, 2018.

  • Temporary Workers

In order to reduce the numbers of temporary workers and increase the share of permanent staff, a statutory maximum lease period of 18 months shall be implemented. After 9 months at the latest, the temporary workers shall receive a salary which will equal to the salary of permanent employees, regardless of a lower salary which may be stipulated in a collective bargaining agreement. In addition, the misuse of other contractual agreements which are used to circumvent statutory regulations shall be minimized. In this respect it is planned to implement a statutory catalogue of criteria which, if met, establish an employment relationship regardless of the way the contractual relationship was classified.

  • Employee Data Protection

The new administration aims to push forward the current negotiations on a European Data Protection Regulation. If a result is not reached within a reasonable period of time, national legislation shall be implemented.

  • Parental Leave and Part-time Employment

Current legislation shall be amended along the lines that employees who work part-time for a fixed period – e.g. to raise a child or take care of a relative – are entitled to return to their original working hours after the term of the part-time employment. Another major aim is to increase the flexibility of parental leave. 24 (instead of currently 12) of the 36 months parental leave may be transferred and taken between the 3rd and 8th birthday of a child without consent of the employer which is required under the current legislation. An increase parental pay (Elterngeld) shall be paid by the state for a maximum of 28 months in case both parents work part-time between 25 to 30 working hours.

  • Pension Age

The pension age is lowered for some employees. From July 2014, employees who have paid social security contributions for 45 years will be able to retire on a full pension at 63, two years earlier than it is currently the case.

  • Gender Equality

Gender Equality at the workplace is an another topic in focus. Starting in 2016, at least 30% of the board members of all publicly-traded companies must be female. Furthermore, large companies must introduce their agendas to raise the percentage of women on the executive board and highest level of management by 2015.