Germany to End Pension Exemption for 6.8 Million Mini-Job Workers as Part of Major Labour Overhaul

A comprehensive package of labour-market and social reforms, rushed through before the summer parliamentary recess, is set to strip the pension exemption from Germany’s 6.8 million mini-job holders – a move that has already drawn fierce opposition from employers’ associations.

Under current rules, workers in so-called Minijobs – positions paying no more than €538 a month – can opt out of paying into the statutory pension system. Now a government-appointed pension commission has recommended scrapping that exemption entirely. Figures released alongside the proposal show that only 20.9 percent of mini-jobbers currently contribute to their pension, leaving the vast majority without any state-backed retirement savings from those roles.

The reform is part of a 33-point plan to stabilise Germany’s pension system over the long term. Parallel to the commission’s work, the Bundestag and Bundesrat have already approved a cost-saving package for the statutory health insurance system. As part of that deal, the states will receive an extra €550 million to finance hospital infrastructure.

The hospitality and employers’ associations DEHOGA and BDA have launched immediate protests against the planned change, warning it will discourage small jobs that are vital for many sectors.

Beyond the mini-job overhaul, the black-red coalition is also pushing through a relaxation of working-time rules. A bill from the Federal Ministry of Labour preserves the traditional eight-hour day but gives collective-bargaining partners far greater flexibility: a weekly working time will be permissible as long as the annual average does not exceed 48 hours. Chancellor Friedrich Merz has meanwhile reignited a debate about work volume, pointing out that German employees clock roughly 200 fewer hours per year than their Swiss counterparts. He insists he is not accusing workers of laziness.

On the bureaucratic front, the government’s “Programme for Recovery and Employment” aims to cut red tape that the ifo institute estimates costs the economy around €150 billion annually. Among the measures: scrapping reporting obligations that have no EU basis, expanding the concept of approval by default to speed up administrative processes, and loosening requirements for company appointees. The Mittelstand, Germany’s small and mid-sized business sector, reacted warily, noting that major EU-driven burdens remain untouched.

Families with an annual household income of €60,000 stand to gain roughly €600 in tax relief under the plan. Yet some entrepreneurs, including tunnel-boring specialist Martin Herrenknecht, are demanding a sharper policy turn and criticising the expansion of the welfare state.

The reform push comes against an increasingly tense political backdrop. On 19 July, around 300 people in the town of Lüdenscheid – mobilised by the IG Metall union – protested against what they see as one-sided cuts targeting workers. The July 2026 ARD-DeutschlandTrend puts government approval at just 13 percent, with the SPD languishing at 12 percent.

Coalition discipline has also been shaken by the surprise resignation of Union parliamentary group leader Jens Spahn on the same day. Chancellor Merz has signalled a possible broader cabinet reshuffle; Chancellery chief Thorsten Frei is considered a front-runner for a key post. A decision is expected by the end of July. Merz criticised the late disclosure of the private reasons behind Spahn’s departure, but the government insists it will not waver from its course on fiscal and social-system reforms – however painful the cuts may be.

en | boerse | 69808157 |