EU Takes Germany to Task Over Craft Residency Rule as Berlin Enacts Workplace Anti-Discrimination Overhaul

The European Commission launched three infringement proceedings against Germany on June 4, targeting rules that limit cross-border business activity. Among the complaints is a requirement in North Rhine-Westphalia that craftspeople must reside locally to operate – a measure Brussels says violates the EU's freedom of establishment. Germany also faces criticism for tax deduction conditions that discriminate against small and medium-sized enterprises investing abroad.

Brussels' action landed on the same day the federal government published a package of legislative changes in the Federal Law Gazette. The official publication, which now exists solely in digital form, included amendments to aviation regulations for the Leipzig-Altenburg and Erfurt-Weimar airports, an update to the greenhouse-gas reduction quota system, and revisions to an international tax treaty aimed at curbing profit shifting.

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Workplace protections get a major update

Germany’s General Equal Treatment Act (AGG) is undergoing its most significant reform in years. Beginning this summer, the deadline for employees to file discrimination claims will double from two to four months. The cabinet approved the changes on May 6. The overhaul also extends protection against sexual harassment beyond the physical workplace and establishes an independent conciliation body within the federal Anti-Discrimination Agency. That agency will gain the power to act as a legal representative for victims in court proceedings.

New rights for low-wage earners and a looming pension reform

From July 1, 2026, mini-job holders will have a one-time option to opt out of their exemption from compulsory pension insurance. By paying their own contributions, they become eligible for disability pensions, rehabilitation benefits, and company pension plans. Employer contributions remain fixed at 15 percent.

Health Minister Nina Warken is preparing a stabilization package for the long-term care insurance system. Without intervention, the projected deficit could reach €17.4 billion by 2030. A draft proposal calls for linking nursing pay to wage growth starting in 2028. To finance the system, the government is considering raising the contribution assessment ceiling and extending the care levy to mini-jobs.

Cybersecurity obligations expand – and courts clarify free-speech boundaries

The NIS-2 implementation law, which cleared both houses of parliament in November 2025, now applies to organizations with at least 50 employees or €10 million in annual revenue that operate in critical sectors. Affected entities must register with the Federal Office for Information Security (BSI), implement risk-management protocols, and establish breach-reporting systems.

Germany’s Federal Court of Justice (BGH) delivered two significant rulings in March 2026. In one, it held that anyone who has disseminated unlawful statements must actively work to have them removed from third-party archive copies. In a second decision on March 10, the BGH reaffirmed broad protections for free speech, stating that even loosely reasoned opinions in news reporting are covered by constitutional guarantees.

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On the funding front, the Education Ministry announced new support for translational research into cancer metabolism, while the Digital Ministry published a third update to the Gigabit Directive 2.0 to accelerate broadband expansion. Hamburg issued a decree categorizing drilling data from before June 30, 2020, and the Environment Agency released updated classifications for water-hazardous substances.

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