The Bundestag has passed the Federal Collective Bargaining Compliance Act, requiring companies that win federal public contracts worth more than €50,000 to prove they pay employees according to sectoral collective agreements. Although the legislation targets wage dumping in domestic construction and services, international service-providers eyeing German infrastructure tenders will also be captured. Under the law—approved on 26 February—foreign contractors and temporary-work agencies must submit a declaration that posted workers receive the same minimum pay, holiday entitlements and rest periods as set out in German collective agreements. Failure to comply can lead to contract termination, fines and exclusion from federal tenders for up to three years. Labour Minister Bärbel Bas said the measure protects fair competition and prevents taxpayers’ money from funding under-paid labour. Industry bodies argue the administrative burden could deter small EU subcontractors, particularly in specialised engineering niches where collective agreements are complex and vary by region. Global mobility teams moving staff to German project sites should audit salary matrices against the relevant ‘Branchentarifvertrag’ and ensure that allowances for travel days, overtime and on-call shifts meet German standards. Immigration advisers note that violations uncovered during workplace inspections could also jeopardise residence-permit extensions for non-EU assignees. The act will enter into force 90 days after publication, giving multinational suppliers a short window to adapt compliance documentation, payroll systems and posted-worker notifications to the new rules.
