Law on adherence to collective bargaining agreements: Tradespeople fear increased bureaucracy.

The German Bundestag has paved the way for the Federal Collective Bargaining Compliance Act. Tradespeople fear increased bureaucracy and liability risks. New documentation and monitoring requirements will be introduced. However, some aspects have been improved.

Public contracts for construction and services will in future only be awarded to companies that have... Employees covered by a collective bargaining agreement or under similar conditions To address: The Bundestag paved the way for this on February 26th. Federal Collective Bargaining Compliance Act (BTTG) leveledIf the Federal Council also approves it in March, the law could come into force in the first quarter of 2026.

There have been some recent changes to the law. For example, Delivery services to be excluded from the scope of application. Furthermore, companies bound by collective bargaining agreements and church employment contract guidelines should be exempt from the [relevant regulations/guidelines]. Certification by prequalification bodies to be privileged. 

Called: Pre-qualified construction companies that are members of an employers' association can digitally prove their adherence to collective bargaining agreements without additional documentation requirements.

There is also a lower limit: The obligation to adhere to collective bargaining agreements applies to federal public contracts and concessions with an estimated contract value of [amount missing]. 50.000 euros net.

For Procurement and service contracts of the German Armed Forces Exceptions are provided for.

Against wage dumping

The law is not only good for employees, but also for companies that pay according to collective agreements and are therefore "often the ones who get the short end of the stick when others pay dumping wages," he said. Dagmar Schmidt (SPD) in the debate in the Bundestag.

A company does not necessarily have to be bound by a collective bargaining agreement to receive a federal contract, he emphasized. Wilfried Oellers (CDU/CSU)It must meet the working conditions (wages, vacation, working hours) stipulated by the Federal Ministry of Labor. 

Ricarda Lang (Alliance 90/The Greens) She said it was good that this law was being passed. The principle is: "No taxpayer money for wage dumping." However, she criticized the numerous exceptions. 

The AfD parliamentary group voted against the law, the Left Party abstained. All other parliamentary groups voted in favor.

Criticism from the skilled trades: Interference with collective bargaining autonomy

➡️ The Central Association of German Skilled Crafts (ZDH) Despite the improvements, it should be noted that the law new documentation, control and bureaucratic requirements creates. At the same time, the association welcomes the fact that companies bound by collective agreements can easily prove their agreement electronically.

However, people are not convinced of its effectiveness."Furthermore, experience with the federal states' regulations on adherence to collective bargaining agreements casts considerable doubt on whether the intervention in collective bargaining autonomy associated with this law will lead to the strengthening of collective bargaining coverage intended by the government," writes the ZDH.

*Currently there are 14 different state laws on adherence to collective bargaining agreementsOnly Bavaria and Saxony currently do not have their own laws on compliance with collective bargaining agreements.

➡️ More bureaucracy is also feared by the Central Association of the Construction Industry (ZDB)Its chief executive Felix Pakleppa Furthermore, he warns of limited effectiveness: "In principle, a legal regulation on adherence to collective bargaining agreements is not necessary and, despite all promises, will only lead to more bureaucracy and liability risks. The political challenges are so great that politicians should not also try to take over the tasks of the social partners."  

➡️ The Construction Industry He sees primarily the positive aspects of the Federal Collective Bargaining Compliance Act: "Public contracts must be awarded through fair competition – without tricks regarding wage costs. Those who adhere to collective agreements must not be disadvantaged in the competitive bidding process." Adherence to collective bargaining agreements strengthens reputable entrepreneurship. and ensures fair conditions on construction sites and in companies,” according to the association.

The planned Guarantor liability for the compliance of subcontractors with collective agreements However, the construction industry warns that this goes too far. Contractors would have to check the classification and pay of every single employee of all subcontractors. "That goes far beyond minimum wage control and is neither feasible nor reasonable."

The only solution proposed is the certificate of compliance with collective bargaining agreements. This is where the law will take effect: "It will become a significant increase in activity by prequalification bodies come who issue certificates of compliance with collective agreements."

It is important that bottlenecks arise here. "A problem with the availability of certificates would immediately become a hindrance to public procurement – ​​with negative consequences for investment, construction projects and employment," warns the construction industry.

➡️ The Bavarian Crafts Day (BHT) The BHT president, however, views the agreement between the CDU/CSU and SPD critically. "We see at the state level that collective bargaining coverage cannot simply be increased by introducing a law on adherence to collective agreements," he says. Franz Xaver Peteranderl.

The German Confederation of Skilled Crafts fears that the federal government could even achieve the opposite of what it intends with its growth initiative – namely, to improve the business environment in Germany and boost the economy.

For many small and medium-sized craft businesses, the law primarily brings more bureaucracy and additional costs, according to Peteranderl. The BHT also criticizes the "de facto exclusion of companies that operate in the market within the framework of laws protecting employees, but do not wish to be subject to a collective bargaining agreement." The entrepreneurial decision not to join or apply a collective bargaining agreement should not lead to disadvantages in the competition for public contracts.

Source: hib; ZDH; BHT; ZDB; Construction industry

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