Wages Under €2 an Hour: German Court to Decide on Workshop Workers’ Right to Minimum Pay

A landmark legal battle in Münster could upend the compensation system for roughly 300,000 people with disabilities employed in German sheltered workshops. The Arbeitsgericht (labour court) in Münster will hear the case in September 2026 after a workshop worker sued for the statutory minimum wage. Currently, these employees earn an average of €233 a month – the equivalent of less than two euros per hour.

Under existing law, workshop staff are classified as “employee-like,” which exempts their employers from minimum-wage rules. A ruling against the current system would force a fundamental restructuring of pay in a sector that has long operated outside standard labour protections.

The case arrives amid a broader push to reshape German labour rules. In early July 2026, the coalition committee presented a 34-point reform package that touches everything from sick leave to severance taxes. One of the most prominent proposals would require employees to submit a medical certificate starting on the first day of illness – a shift from the current rule that allows up to three days without documentation.

For high earners with gross annual salaries above €177,000, the government wants to weaken dismissal protection. Other elements include extending fixed-term contracts without a specific reason to as long as four years, and granting tax benefits to employees who accept severance packages and quickly re-enter the workforce. Working-time flexibility was initially part of the package but was set aside for now.

Some companies are already moving independently. The automotive supplier Aumovio struck an agreement effective 1 July 2026 to introduce a 38-hour work week without wage compensation. At Mercedes-Benz, management is debating a return to the 40-hour week, a step that unions have loudly opposed.

Gig-Economy Failures and a Lone Bright Spot

While lawmakers wrestle with the reform package, the digital labour market continues to draw sharp criticism. The latest Fairwork report, produced by the Berlin Social Science Center (WZB) and the University of Oxford, assesses working conditions on digital platforms. Only Flink, a food-delivery service, earned seven out of ten points – the only operator to demonstrate consistently fair standards.

The rest fared poorly. Wolt, Bolt, Uber, Uber Eats, and Lieferando each received zero points. Researchers pointed to the absence of living wages, non-transparent contracts, and inadequate social security coverage. Lieferando came in for particular scrutiny: since spring 2025, the company has increasingly relied on subcontractors, further eroding fair conditions.

The report comes as politicians debate a compulsory direct-employment rule for platform workers. EU member states have until 2 December 2026 to transpose the bloc’s Platform Work Directive into national law.

Minijob Overhaul Divides Experts and Lobbyists

Another flashpoint in the reform debate centres on Germany’s so-called “minijobs” – minor-employment arrangements with a monthly earnings ceiling of €603. The government is considering raising the flat-rate payroll tax from two to five percent and introducing compulsory pension insurance for all minijobbers except school students.

Ulrich Walwei, a professor at the Institute for Employment Research (IAB), described the proposals as half-hearted. His calculations show that the changes would increase monthly costs for employers by roughly €18 per worker. State revenues could rise by between €500 million and €1 billion. Yet Walwei doubts the plan will do much to convert minijobs into regular, social-security-paying positions. “I don’t expect significant effects in terms of transitioning minijobs into employment subject to social insurance contributions,” he said, warning of weak bridging effects and the risk that regular jobs would simply be displaced.

Business associations have reacted with alarm. The retail trade federation and the hotel and restaurant association DEHOGA jointly wrote to the federal government, warning that the reforms would cause irreversible damage to the hospitality, retail, and agricultural sectors. They found an ally in Markus Söder, leader of Bavaria’s CSU, who came out firmly against any abolition of the minijob model and stressed its importance for those industries.

As the September court date in Münster approaches, the multiple strands of labour reform – platform work, marginal employment, and disability workshop pay – are converging into a single, contentious national debate about who deserves full worker protections and who can still be left out.

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