In the ARD Tagesschau news program, I commented on the recently passed law on compliance with collective bargaining agreements. We view the law critically: It prescribes in detail which collectively agreed working conditions medium-sized companies must meet in order to receive public contracts from the federal government – from wages and bonuses to working hours, vacation and special payments.
The goal of preventing wage dumping is valid. However, eight out of ten medium-sized businesses are not bound by collective bargaining agreements. For them, the law means new regulations as well as additional verification and documentation requirements. Even companies with good wages and modern compensation models could be disadvantaged in public procurement as a result.
Instead of the hoped-for reduction in bureaucracy, there is a risk of increased complexity. In our view, the focus should be more on reducing bureaucracy and strengthening the competitiveness of small and medium-sized enterprises (SMEs).
