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German Labor Minister Plans Law to Require Firms to Adhere to Collective Agreements for Federal Contracts

Labor Minister Heil also wants to introduce a law by the summer according to which federal contracts may only be awarded to companies that adhere to collective agreements. “If we as a state spend tax money, then entrepreneurs who don’t pay their people properly should no longer benefit from it.” The SPD, Greens and FDP had already agreed this in their coalition agreement in order to strengthen collective bargaining. By June, he and Minister of Economics Robert Habeck (Greens) will present a draft law that stipulates adherence to collective bargaining agreements in the federal government, said Heil. If everything goes well in the Bundestag, the law should come into force on January 1, 2024.

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