The new legal requirements will apply to contracts with an estimated value of €50.000 or more for services and €100.000 or more for construction work. (Photo: © schlenger86/123RF.com)
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April 2026
In North Rhine-Westphalia, public contracts will henceforth only be awarded to companies that pay the wages stipulated in the respective industry collective bargaining agreements. The state government has now passed a corresponding law.
Public contracts in North Rhine-Westphalia will in future be awarded exclusively to companies that commit to paying at least the wages stipulated in the respective industry-wide collective bargaining agreements. To this end, the state government has passed the Wage Guarantee Act. The new legal requirements will apply to contracts with an estimated value of €50.000 or more for services and €100.000 or more for construction work.
The Ministry of Economic Affairs drafted the law jointly with the Ministry of Labor . "The regulation applies to companies in sectors where many public contracts are awarded and where below-standard wages distort competition," the state government stated. This also affects subcontracting and temporary employment agencies. To avoid placing an unnecessary burden on businesses, the law was designed to be as streamlined as possible.
The draft law stipulates that the new regulations apply to the state of North Rhine-Westphalia and to the bodies under its supervision. The legal situation remains unchanged for cities, districts, municipalities, and municipal associations in North Rhine-Westphalia, and for the bodies predominantly financed by them or under their supervision. The existing provisions of the Public Procurement and Contract Compliance Act will be incorporated into the new law.
Implementation and monitoring will be carried out digitally. A digital portal will be available through which companies can submit their declaration of commitment to paying minimum wages and receive information and support services. An auditing office will be established at the German Pension Insurance Rheinland and the German Pension Insurance Westphalia.
Operations management
Operations management
Operations management
The auditing body will conduct ad hoc checks to ensure that contractors, subcontractors, and temporary employment agencies are fulfilling their obligations to pay the stipulated minimum wages. These audits will be carried out at companies not bound by collective bargaining agreements. Due to federal regulations, companies are already required to maintain the relevant documentation. Companies bound by industry-wide collective bargaining agreements will not be audited and are exempt from the obligation to provide proof of compliance.
"When a public contract is awarded – for example, for the construction of a school – the lowest bidder should not win, but rather a company that pays its employees fairly according to the collective agreement. Paying good wages secures skilled workers, strengthens local purchasing power, and ensures sustainable competition. That is precisely what the Collective Bargaining Wage Protection Act achieves," says Economics Minister Mona Neubaur (Greens).
"Businesses here in North Rhine-Westphalia will particularly benefit if we prevent price wars at the expense of wages. At the same time, we want to ensure that employees working on public contracts are paid appropriately and that competition is not fought on their shoulders. But it is equally clear to us that companies must not be burdened unnecessarily," explains Labor Minister Karl-Josef Laumann (CDU).
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