At a Glance

• A new coalition agreement between Germany's Christian Democratic Union and the Social Democratic Party contains several labor and employment law proposals.
• Provisions in the agreement address skilled worker immigration, minimum wage, collective bargaining, pension reform, flexible work hours, AI in the workplace, among other key topics.
• Many of the proposed measures are still in the consultation and development stages, and their actual rollout could take time.

Germany's political landscape is undergoing significant changes. After new elections had to be held early in February 2025, the Christian Democratic Union (CDU) and the Social Democratic Party (SPD) concluded a coalition agreement. This new government promises to tackle a range of issues, many of which will have direct implications for German employment law and thus employers. For foreign employers with operations and employees in Germany, understanding these changes is crucial to maintaining compliance and navigating the evolving labor and employment framework. Below is an overview of the key labor-related provisions in the 2025 coalition agreement which are expected to be implemented over the next four years.

Labor and Skilled Worker Retention

The coalition government emphasizes securing a steady supply of labor and skilled workers as a cornerstone of Germany's future economic success. The agreement outlines measures to reduce bureaucratic hurdles and promote skilled worker immigration, including the...

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