German Retail Braces for €1.6B Annual Burden as Minijob Contribution Hikes Loom

Planned increases in lump-sum social contributions for Germany’s mini-jobs could saddle businesses with an extra €1.6 billion each year, according to the German Retail Federation (HDE). The trade body fiercely attacked the government’s proposal to raise the flat-rate levy from 13 to 17.5 percent — a rate that has not budged since 2006.

HDE president Alexander von Preen warned that the additional cost would hit retailers especially hard. The sector has already shed more than 70,000 jobs subject to social insurance over the past three years. “These employment forms must be protected,” he said, calling for a hard cap of 40 percent on non-wage labor costs.

The reforms also affect midi-jobs — positions paying between €603 and €2,000 monthly. Von Preen urged policymakers to scrap the free co-insurance of family members in statutory health and long-term care insurance, and to abolish the “pension at 63” scheme. Only by doing so, he argued, could labor costs be kept manageable.

July 1 Brings a One-Time Opt-In Window

Separate from the broader reform controversy, a new rule takes effect on 1 July. Mini-job workers who once chose to opt out of pension insurance will get a single chance to revoke that decision. Previously, the exemption was irrevocable once granted.

The revocation must be submitted in writing to the employer and applies uniformly to all concurrent mini-jobs. It takes effect only going forward and cannot be reversed. After revoking, workers may not reapply for an exemption. Those who become pension-insured pay a 3.6 percent employee contribution on their earnings. The monthly mini-job earnings threshold has been €603 since the start of the year. In January, about 7.46 million people in Germany held such positions.

Long-Term Care and Pay Transparency: Further Changes

The new Long-Term Care Reorganisation Act (PNOG) introduces additional financial shifts. Employers must now pay a lump-sum contribution of 3.6 percent to the long-term care insurance fund for mini-jobbers. The surcharge for childless employees is scheduled to rise from 0.6 to 0.7 percent at the start of 2027. At the same time, the contribution assessment ceiling for long-term care insurance will climb above €7,000 monthly.

On pay transparency, Berlin has kicked the can down the road. The government postponed implementation of the EU directive until 2027. Despite the delay, experts advise companies to align their compensation systems and internal transparency rules in good time, because information rights and obligations in recruitment processes are already legally binding.

Summit Ends Without Concrete Deals

A roughly three-and-a-half-hour meeting on 10 June between top government officials, business federations and unions produced no firm decisions. Chancellor Merz met with representatives from the BDI, BDA and DGB to discuss labor markets, social insurance and red-tape reduction.

Unions demanded a compulsory, employer-financed occupational pension scheme. Business representatives flatly rejected that. Dr. Hans-Jürgen Völz of the BVMW, which represents medium-sized firms, warned of insolvency risks and a loss of competitiveness, especially for small enterprises.

Further talks are scheduled for the coalition committee on 30 June and 1 July, with the aim of passing a reform package before the summer break.

Separately, the planned Building Modernisation Act is also drawing fire. Green party parliamentary leader Katharina Dröge told the Bundestag that small commercial enterprises — such as bakeries or care services — would face steep extra costs, since the law’s rent-cost brake does not apply to them.

en | boerse | 69524444 |