A proposed law on tariff conformity, planned by German Federal Labor Minister Bärbel Bas, has sparked intense opposition from the business sector. According to the head of the Federation of German Employers’ Associations, Steffen Kampeter, the measure would stifle competition instead of strengthening it.
The law, presented as a social policy instrument, is perceived by critics as a “bureaucratic monster” with costly consequences. “The enforced tariff conformity will harm small and medium-sized enterprises, which will often withdraw from public tenders. As a result, it will become even more difficult and time-consuming to build schools and roads” Kampeter warned.
The German government is planning a new law, which would require companies to have a collective bargaining agreement in place to be eligible for public contracts worth more than €50,000. This proposal was previously blocked by the Free Democratic Party during the grand coalition era.
Saxony-Anhalt’s Minister of Economics and a member of the CDU’s leadership, Sven Schulze, also expressed concerns about the potential for bureaucracy to grow. “From my experience at the state level, I can say that a federal tariff conformity law can quickly turn into a bureaucratic monster, even if that’s not the intention” Schulze said, adding that the law would come with various reporting and documentation requirements, which would further burden companies. Schulze cautioned the coalition against a “hasty decision” and appealed for a thorough consideration of the law.