On July 2, 2026, the German Federal Government presented a reform package aimed at supporting economic growth and employment. The package includes 34 measures. Its overall goal is to make Germany a more competitive business location and to encourage investment.
Several of the planned measures would make German employment law more flexible. If implemented, they could make life easier for employers, especially start-ups and international companies. This applies in particular to fixed-term hiring and separations from senior employees and key employees.
In our three-part series, we look at the most important planned changes from an employer’s perspective:
Part I – More Flexibility for Employers: Planned Changes to Fixed-Term Employment and Terminations
Part II – Sick Leave and Pension Reform: What This Means for Workforce Planning and Restructurings
Part III – Co-Determination, Digitalization and Less Red Tape: The Planned Changes at a Glance
The Government’s reform package of July 2, 2026 is not limited to individual employment law. Several planned changes also concern works constitution law and tariff autonomy.
The key proposals and their possible impact are set out below:
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