German Public Sector Sweetens the Deal: Remote Work Worldwide and Up to 20% Pay Rise—But at a Price

Brandenburg has struck a landmark pay deal for its civil servants, granting salary increases of as much as 20 percent—while simultaneously demanding an extra hour of work each week until mid-2032.

The agreement, reached between the state’s finance ministry and trade unions at the end of June, comes into effect retroactively from 1 January 2026. Teachers will see monthly pay rises of between €900 and €1,000. In return, the standard weekly workload will rise temporarily from 40 to 41 hours, a measure set to expire in July 2032.

The state’s hand was forced by a Federal Constitutional Court ruling in November 2025 on civil service pay in Berlin, which found existing salary levels inadequate.

Across the country, federal agencies are scrambling to attract skilled workers through a mix of generous remote-work options and competitive compensation—even as the finance minister demands deep budget cuts.

Remote Work Goes Global for One Agency

The Kraftfahrt-Bundesamt (KBA) —Germany’s Federal Motor Transport Authority—now permits its employees to work from anywhere in the world for up to 40 days per year. A striking 87.4 percent of its 944 eligible staff hold authorization for the scheme.

Other agencies are more cautious. The Federal Agency for Civic Education allows up to 30 days of work annually within the EU. The Federal Office for Information Security (BSI) lets staff work remotely for up to 60 percent of their time. The Federal Employment Agency caps its EU-based workations at ten days. The Federal Cartel Office and the Federal Office of Administration continue to restrict mobile work to within Germany’s borders.

The inconsistency has drawn political fire. Opposition lawmakers warn that such models send the wrong signal, and the German Police Union is calling for unified regulations. Yet agencies argue they have little choice: a severe shortage of qualified personnel forces them to remain attractive employers.

Austerity Looms on the Federal Level

At the same time, Finance Minister Lars Klingbeil has instructed all ministries to tighten their belts. For the 2027 budget, departments must cut spending by one percent—roughly €5 billion. From 2028, the savings target climbs to three percent.

A draft budget is slated for cabinet discussion on 6 July.

Pension Commission Eyes Long-Term Fixes

The growing burden on the public sector has also captured the attention of Germany’s pension commission. Proposals currently on the table include reducing the number of new civil-service appointments and slowing the growth of state pensions.

A moderate increase in the standard retirement age—to 67.5 years by 2041—is also under discussion.

Experts caution, however, against any hasty integration of civil servants into the statutory pension insurance system. Such a move, they warn, would create a massive dual financial burden lasting roughly 40 years and would face serious constitutional obstacles.

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