Updated draft law on compliance with collective bargaining agreements

At a glance

• The federal government has published a draft law on compliance with collective bargaining agreements.
• Under the law, public contracts worth EUR50,000 or more will require a contractual guarantee to comply with certain minimum working conditions in accordance with collective bargaining agreements.
• Contractors will also be obligated to ensure compliance by any subcontractors.

The Federal Ministry for Labour and Social Affairs has published a draft law on compliance with collective bargaining agreements. An earlier draft, submitted by the previous government in late 2024 had not passed the federal parliament before elections were held in February 2025.

Under the new draft, the law will apply to contracts with an estimated value of EUR50,000 or more. The earlier draft had provided for a lower threshold. 

Contracts covered by the new law will need to include a binding condition, requiring the contractor to comply with certain minimum working conditions and to ensure that subcontractors do the same. Respective working conditions will be defined by statutory order (Rechtsverordnung) on the basis of existing collective bargaining agreements covering remuneration, paid holiday, maximum working hours, and rest periods.

The draft law will need to pass both the federal parliament (Bundestag) as well as the federal council (Bundesrat). It is expected to come into force by 1 January 2026.