Germany: Newsflash 2026: Your guide to upcoming employment law changes

The year 2025 is coming to an end – with 2026, fundamental changes to employment law are just around the corner. The announced changes will affect almost all areas: from the recording of working hours to the works constitution and company pension schemes. To help you start the new year well prepared, we have summarized the most important changes for you:

Pay Transparency Act – more transparency, stricter rules

When? First draft perhaps as early as December 2025 / January 2026 (implementation deadline: 7 June 2026)

What? No more questions about remuneration from previous employer allowed. All employees can talk to their colleagues about their income. In case of doubt, employers must prove that the remuneration is non-discriminatory!

How? The EU Wages Directive (EU) 2023/970 requires action. Prepare yourself for extended reporting obligations and possible sanctions. Details such as the "concept of remuneration" and the scope of the components to be disclosed are still being discussed in the legislative process. Important: You need a non-discriminatory remuneration scheme, which you can publish on the intranet or submit to a court in case of doubt and which should include all people already employed.

Working Hours Act – Time clock 2.0 – electronic and for everyone

When? First quarter of 2026

What? Working time recording is definitely coming - probably as mandatory electronic recording. Also new: weekly working hours will replace the previous daily working hours and enable more flexible working time models. The principle of "labour protection cannot be bought off" applies without exception: attempts to exempt high earners earning 1.5 times the income threshold from the obligation to record working hours have failed politically. It remains to be seen how trust-based working hours will be regulated!

How? There will be no differences between mobile working, teleworking, home office and office work – the same principles of working time law will apply to all forms of work. On the positive side, working time recording can be delegated to employees, provided you have control over this. Prioritise this change in your compliance structures.

Works constitution 2.0 – Works council elections by mouse click?

When? Date still open; the current works council election period in 2026 will not yet be digital.

What? Digital works council elections should be possible in the future. The 2030 election could already take place at the click of a mouse. The trade unions are to be given digital access rights to the company.

How? Despite massive criticism from the business community, Section 87 No. 6 Works Constitution Act (BetrVG) on codetermination in digital matters remains untouched – the standard is not expected to be reformed. As a company, you should lobby!

Labour Market Strengthening Act – Working more is worthwhile – tax-free

When? Definitely in 2025 (active pension (“Aktivrente”)), further measures in 2026

What? Tax-free bonuses for extra work and overtime as well as a tax-privileged bonus for switching from part-time to full-time are planned for 2026.

How? Particularly relevant in practice: A new temporary employment option is to be created for older employees. It can be assumed that the ban on previous employment in Section 14 para. 2 sentence 2 Part-time and Fixed-Term Employment Act (TzBfG) will be relaxed - for example, a new fixed-term employment could only be permitted again after ten years. This opens up new flexibility in the employment of experienced specialists. However, please bear in mind Section 41 para. 1 sentence 2 Social Code VI (SGB VI).

Reducing bureaucracy – less effort, more efficiency

When? Immediate programme from the end of 2025, moderation in 2026

What? Noticeable relief through an immediate programme to reduce bureaucracy in occupational health and safety. In 2026, the prevention regulations in SGB VII will be modernised and SME checks will be introduced. Specifically, 120,000 company representatives are to be reduced in Germany in the short term over the next few years.

How? In future, company representatives will only be mandatory in high-risk sectors. In addition, unnecessary formal requirements in occupational health and safety will be modernised and the regulations on accident insurance will be reduced.

Collective bargaining law – industry standards become mandatory

When? At any time, possibly before the turn of the year 2026

What? In future, the Federal Ministry of Labour and Social Affairs (BMAS) will define a collective agreement for each sector as the standard for remuneration. The remuneration key data from the respective collective agreements will be binding - but not the full application of the entire collective agreement.

How? You must comply with sector-specific minimum standards for remuneration, but without being forced into a full collective agreement. This restriction offers a certain degree of planning security.

Minimum Wage Act – keeping an eye on employment costs

When? 1 January 2026

What? The statutory minimum wage increases to EUR 13.90 per hour. Additionally, the European Court of Justice largely upheld the EU Minimum Wage Directive on 11 November 2025. Particularly important: The provisions to promote collective bargaining in Europe were confirmed in full. The judgement has no impact on German Minimum Wage Act (MiLoG) – Germany already fulfils the requirements.

How? Check your wage and salary structures in good time and adjust them at the turn of the year. Also pay attention to the effects on marginal employment and working students. Factor the additional wage costs into your 2026 budget planning at an early stage. The ECJ judgement means further political tailwind for measures to strengthen collective bargaining - expect consistent implementation of the Federal Collective Bargaining Act.

Keep an eye on long-term projects

Company Pensions Strengthening Act

A long-term project for the 21st legislative period that has not yet been dated. The early-starter pension could only be included in a later legislative package. The Riester pension is to be given a second chance and completely reorganised. Through the social partners, more flexible and portable company pensions are to be created, which will become more attractive through exemption from social security contributions and tax concessions. The social partner model (Section 24 Company Pensions Improvement Act (BetrAVG) is being expanded: in future, non-collectively bound employers and employees will also be able to participate with the consent of the collective bargaining parties. One particularly innovative approach is the planned early-starter pension, which is intended to enable children from the age of six to build up company pensions. SMEs can offer attractive company pension schemes without being bound by collective agreements. Employees benefit from improved pension provision with tax and social security advantages. It should be noted that collective bargaining parties can pass on costs to participants. The cost structure should be carefully examined before participation.

Platform directive and status procedure

The specific implementation remains to be seen, with no draft legislation expected in the first half of 2026. The objective is clear: no separate employment law is to be created for platform workers. Instead, the aim is to achieve equal treatment for all employees and a clear distinction between self-employed/freelance workers and employees/workers.

Mobile working

A separate law on mobile working is not planned. The legislator relies on contractual autonomy and expects collective regulations through collective agreements, works agreements and other co-determined solutions. The BMAS has published recommendations on workplace safety for mobile working on its website.

Your roadmap for 2026

Immediately (end of 2025 / beginning of 2026)

• Review remuneration regulations for non-discrimination and conformity with the directive
• Implementation of the active pension
• Collective bargaining law with sector-specific remuneration key data

First half of 2026

• Mandatory (electronic?) recording of working hours
• Tax incentives for overtime and switching from part-time to full-time work
• New fixed-term employment options for older employees
• Pay Transparency Act, in particular information obligations

In the medium term

• Implement the Platform Work Directive & External Workers 2.0
• Revision of the status determination procedure under Section 7a/b of the Social Security Code IV (SGB IV)
• Reorganisation of the Riester pension
• Works constitution 2.0
• Reduction of 120,000 company representatives

Prepare now, benefit later: The legislative changes are coming in 2026 – how you deal with them will determine the risks and opportunities:

We analyse your individual need for action, develop practical solutions and support you during implementation. Get in touch with us – preferably before the end of the year.