Germany's Biggest Labor Law Shift in Decades: Weekly Hours Replace Daily Caps, Job-Testing Allowed, Sunday Work Expanded

Chancellor Friedrich Merz used the country's security situation to defend an ambitious overhaul of German labor law, presenting details in mid-July that include a landmark switch from daily to weekly maximum working hours. Labour Minister Bärbel Bas is expected to submit a bill in the autumn of 2026.

The coalition agreement had already floated a weekly-hour orientation. Now it is taking concrete shape — and drawing fierce opposition from trade unions. They warn the traditional eight-hour day is being diluted. An earlier draft from June had kept the daily cap intact but opened more exceptions. Economist Martin Werding has backed the government, arguing resistance to modernisation is misplaced and the move away from a daily ceiling is overdue.

Job-to-Job: Up to Four Weeks Testing a New Employer

The cabinet has approved a "Job-to-Job-Erprobung" (job-to-job trial). Workers can test a new position for up to four weeks — six in exceptional cases — without quitting their current contract. The accompanying amendment to the Social Code Book III is set to complete its legislative journey by the end of November 2026.

Red tape is being slashed in parallel: annual bureaucratic costs should fall by roughly 720 million euros. That may involve scrapping up to 123,000 safety officers in small and medium-sized enterprises. Another change: unemployment benefit recipients will no longer have to be physically present at their postal address as long as digital communication is guaranteed.

Stricter Rules for Employees

The reform package also tightens obligations. A sick note from day one of illness will replace the current phone-in sick arrangement. Fixed-term contracts without a specific reason can be extended from two to four years, with up to six renewals.

Discrimination lawsuit deadlines are lengthened from two to four months. At the same time, the government strengthens works council co-determination rights when employers introduce AI-based surveillance systems.

Minimum Wage and Agency Work on the Rise

The statutory minimum wage is set to climb to 14.60 euros in January 2027, following an earlier increase to 13.90 euros at the start of 2026. The mini-job earnings threshold rises to 633 euros, while the flat-rate tax on such jobs jumps from two to five percent in January 2027.

Temporary agency work is getting costlier too. The lower wage limit has been 14.96 euros since July, moving to 15.33 euros in September and reaching 15.87 euros by April 2027.

Bakeries Get Eight Hours on Sundays, Libraries Six

One of the most tangible changes targets bakeries: from January 2027, they can deploy staff for up to eight hours on Sundays and public holidays — the previous limit was three. Libraries will be allowed six hours of Sunday work.

Chancellor Merz argued the economic direction of the entire package is also necessary given the current security environment. For autumn 2026, he also signalled a nursing care reform and the introduction of a state-subsidised retirement savings depot starting in 2027.

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