The proposed Federal Collective Bargaining Loyalty Act (BTTG) is poised to generate substantial revenue for social security systems and the national treasury, potentially yielding at least €190 million annually, according to calculations by the German Trade Union Confederation (DGB). This figure, reported by the Neue Osnabrücker Zeitung, highlights a significant potential windfall linked to the increased wage volume the legislation is expected to trigger.
DGB board member Stefan Körzell contends that critics frequently overlook the substantial financial benefits. “Even with conservative estimations, this law generates a three-digit million-euro sum annually for employees, the treasury and social security funds” he stated. This potential revenue stream stands in stark contrast to the “enormous damage” caused by existing practices of tariff avoidance, a phenomenon the BTTG aims to curtail.
While the initial costs of implementation and oversight are estimated at a one-time expense of approximately €7.4 million and ongoing fixed costs of around €3 million annually, the DGB argues these are manageable when weighed against the potential financial gains and the current economic drain of non-compliance.
Ahead of Monday’s parliamentary hearing on the BTTG, the DGB is pushing for a stricter legislative approach, criticizing the current draft as containing excessive loopholes and exemptions. Körzell stressed the need for thorough revisions by parliament, warning that weakened legislation will severely hamper effective enforcement. “The Christian Democratic Union (CDU) seems to champion law and order everywhere, except in the labor market. We need a BTTG with teeth this year.
The DGB particularly objects to the proposed threshold within the draft, which it claims will exclude numerous smaller contracts from the scope of the law, impacting artisans and small-to-medium enterprises. Furthermore, waivers for entities such as the Bundeswehr (armed forces), security services and outsourced services are deemed unnecessary and should be eliminated. The union advocates for a robust enforcement regime including clear liability rules, adequate staffing, proof of compliance obligations extending to subcontractors and temporary employment agencies.
Dismissing employer concerns about the Act generating unnecessary bureaucratic burdens, the DGB points to successful implementations in the states of Saarland and Berlin, where tariff-bound companies utilize a straightforward, two-page form – a process described as entirely uncomplicated.
