The labour minister of North Rhine Westphalia, one of the strongest economic hotspots in Europe, warned on the weekend that exploitation of contract workers comes as a direct consequence of improved working conditions for temporary agency staff.

After major collective agreements have increased pay for temporary workers across Germany, the minister Guntram Schneider of the social democrats said that contract work is turning into gateway of “wage dumping and bad working conditions.”

He criticised the German government for blocking tighter regulations on contract work and lobbied for the introduction of a national minimum wage at €8.50 per hour. This comes after the German labour minister Ursula von der Leyen recently rejected plans to further tighten the temporary staffing markets, something some unions and politicians want to see in the market for contract labour.

Labour experts have also cautioned that contract work in the country is increasingly used to avert employment rights while some unions have argued that companies could indeed make more use of contract labour to avoid higher costs in the sector.

“With the increased use of contract work more black sheep are looking for a legal loophole to lower salaries,” Mr Schneider now said. He said this was particularly the case in the trade industry where hundreds of thousands are employed under “sham contracts” and receive lower salaries than their permanent co-workers.

Contract workers also have to pay their own social contributions which the labour minister condemned as an “early capitalistic exploitation.”