A new wage agreement for the German temporary employment sector was reached yesterday with the Community for Temporary Work (VGZ), which represents the employers’ side, coming to terms with German Trade Union Confederation on the new tariffs.

The VGZ is the negotiating community of the two Employers 'Associations of Temporary Work, the Federation of German Employers' Associations Personaldienstleister (BAP) and the Association of German Temporary Workers(IGZ) under the leadership of the negotiators of the VGZ Thomas Bäumer (BAP) and SvenKramer (iGZ).

The new rate changes are set to take effect on 1 March 2017 and increase on 1 April 2018, 1 April 2019 and 1 October 2019, for each of the tariff areas in the East and West. This means that the agreement will cover a term of 36 months until 31 December 2019. A further wage adjustment will take place on 1 April 2021. From this point onwards, the scope of the West’s wages will be extended to the entire federal territory.

“There were tough negotiations,” Thomas Bäumer, vice president of Federal Employers' Association of Personnel Service Providers (BAP), said. “ In order to reach a collective agreement, employers have gone to the limit of the company's burdens. It is to be feared that the qualifications, particularly in the new federal states, will make the employment of temporary workers considerably more difficult. With this rate agreement, the number of temporary workers in the East will increase significantly, who will earn considerably more than the permanent staff.”

There are 9 pay grades for temporary workers in Germany, which take into account different levels of qualification. Low skilled jobs would fall into the lowest pay grades (E1-E2) while more qualified and technical roles would be covered by the higher pay brackets.

For the graph below, ‘Anpassungsstufe zur Anpassung der Entgelte an den gesetzlichen Mindestlohn’ translates to adjustment level to adjust the remuneration to the statutory minimum wage, which comes in on those dates and ‘Stufe’ translates to step.