Germany’s Labour Minister Demands Tax Relief for Workers in Exchange for Flexible Hours Reform

Bundesarbeitsministerin Bärbel Bas (SPD) has linked her push for a more flexible working-hours regime to a demand that small and middle incomes be relieved by at least €500 per year, possibly starting in January 2027. The tax cut is meant to act as a social counterweight to a planned overhaul of the Arbeitszeitgesetz – Germany’s working-time law.

Bas intends to submit a draft bill in June that would scrap the current daily upper limit of eight hours (ten under certain circumstances) and replace it with a purely weekly cap. A top-level meeting of the coalition committee with employer and employee representatives is scheduled for June 10, and the entire reform package is supposed to be finalised by June 30.

The minister has attached strict conditions to any liberalisation. She insists on protections through co-determination rights and collective bargaining agreements, plus mandatory electronic time-tracking. “The reform must not disadvantage women,” Bas said.

Her tax-reform demand – already a subject of internal coalition debate – is described as a compensatory measure for workers who might face longer individual shifts. Within the workforce, opposition is widespread. Yasmin Fahimi, head of the German Trade Union Federation (DGB), called the plan “economically and socially misguided”. She warned that a weekly-only limit would allow shifts of up to 13 hours.

The Gewerkschaft Nahrung-Genuss-Gaststätten (NGG) pointed to accident statistics: after the eighth hour the risk of injury climbs sharply, and a 12-hour shift carries an 80 percent higher accident risk than a standard day. Research by the Hans-Böckler-Stiftung and a WSI survey backs union concerns: three-quarters of employees fear their work-life balance would suffer.

Not all employers are pushing for maximum flexibility. Michael Vassiliadis, head of the IG BCE union, called the debate unnecessary. “Existing collective agreements already offer enough flexibility,” he said. Reforms, he added, should not serve to consolidate the federal budget.

Support for the change does come from the Hotel and Restaurant Association (Dehoga) in Lower Saxony, where rigid daily limits are seen as outdated – for example during wedding banquets.

Economist Holger Schäfer of the IW Institute argues that, given demographic change, Germany needs a higher volume of work. IfW expert Moritz Schularick, however, doubts the current reform will deliver the hoped-for breakthrough. A compromise from the Rentenkommission (pensions commission) is expected by June 29.

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