German Employers Decry 'General Suspicion' as SPD Pushes Ban on Unpaid Overtime in Working Hours Reform
Published on 06/17/2026 at 19:44 | Redaktion boerse-global.de
The German debate over working-time rules sharpened this week after the Social Democratic Party (SPD) reportedly proposed a ban on unpaid overtime. The plan, leaked to media on Tuesday, met immediate resistance from the Mittelstand, which branded it a bureaucratic burden. The move comes as the coalition government prepares to overhaul the Arbeitszeitgesetz (Working Hours Act) – a reform that has split business, unions and scientists alike.
The association VUV e. V., representing small and mid-sized employers, responded on Wednesday by demanding an end to what it called a "general suspicion" against companies. In a statement, the group argued that current discussions unfairly paint all employers as trying to circumvent worker protections. The debate gained momentum after a high-level meeting in the Chancellery on 10 June, where business representatives pushed for more flexibility while unions warned against eroding employee rights.
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At the heart of the planned reform is a shift from a daily to a weekly maximum working time. The VUV welcomed this change, saying a rigid daily cap no longer fits modern work patterns. But the SPD's apparent bid to outlaw unpaid overtime would, according to business groups, tie companies up in red tape without improving conditions for workers.
DGB chair Yasmin Fahimi, who attended the Chancellery meeting last Monday, called the range of proposals a "fairground of reform ideas." She specifically cautioned against the potential loss of public holidays or the reintroduction of waiting days for sick pay – warning that such steps would amount to social dismantling.
Researchers split over health impact
Economic and health assessments of the reform proposals remain contradictory. DIW president Marcel Fratzscher said on Wednesday that the fixation on the eight-hour day distracts from deeper structural problems in German firms. While backing targeted flexibility, he insisted on keeping a daily ceiling.
Support for the employer stance came from the Institut der deutschen Wirtschaft (IW). Citing data from the Federal Institute for Occupational Safety and Health (BAuA), IW researchers argued that employees with very long workdays are not statistically more prone to illness.
That conclusion was rejected by researchers at the Wirtschafts- und Sozialwissenschaftlichen Institut (WSI). They warned on Tuesday that extended daily hours carry health risks and could worsen childcare conflicts if schedules become less predictable.
Digital time-tracking becomes mandatory from 2026
Alongside the reform debate, new legal requirements are looming. Starting in early 2026, electronic working-time recording will become compulsory across the DACH region. A draft bill from the Federal Ministry of Labour mandates near-real-time digital documentation to boost transparency. Companies that violate the duty face fines of up to €30,000. Planning offices, in particular, worry about the cost of linking time recording directly to project billing.
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Courts and pension plans add to the mix
Labour courts have also been active. The Thuringian State Labour Court ruled on 2 March that blanket company policies limiting consecutive holiday to two weeks are unlawful under the Federal Holiday Act, unless justified by compelling operational reasons.
On the pensions front, the Gesamtverband der Deutschen Versicherungswirtschaft (GDV) called on Wednesday for measures to strengthen company pension schemes. According to a recent survey, 68% of businesses want stronger tax incentives. A reform package from the pension commission is expected in early July.
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