The Federal Cabinet in Berlin has approved a 10-point “Action Plan against Social Benefit Abuse and Exploitation”, a package drafted jointly by Labour Minister Bärbel Bas and Interior Minister Alexander Dobrindt. Announced on 23 September 2026, the initiative is expressly aimed at stopping organised gangs that lure workers from other EU countries into sham jobs and overcrowded ‘Schrottimmobilien’ in order to divert German welfare payments. At the heart of the plan is much closer data-sharing between job-centres, customs, immigration offices and the police. Job-centres have already begun sending automatic “push notifications” to the customs authority when they suspect undeclared work; five new regional competence centres for benefit fraud are to be created within the Federal Employment Agency. Employers who file false payroll data will in future be liable for any wrongly paid social benefits, extending rules already introduced in July under SGB II to the social-assistance regime (SGB XII). Municipalities will also receive new powers under an amended Building Code to seize or expropriate dilapidated properties used as mass accommodation for migrant workers. At federal level, the Freizügigkeitsgesetz/EU and SGB II will be tightened to allow the withdrawal of benefits from individuals wanted on an arrest warrant. Victims of labour exploitation will gain better access to counselling, and information campaigns (“Know before you go”) will be launched in key source countries. For companies that rely legitimately on EU mobile workers, the ministry insists the measures will create a “level playing field”: genuine postings and intra-EU transfers will face less unfair competition from undercutting operators. HR and global-mobility managers, especially in construction, logistics and meat-processing, should review subcontractor compliance and be prepared for more frequent inspections. Inbound assignees on local German contracts are unaffected, but corporate relocation teams may see stricter document requests when registering EU staff at local authorities.
