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Germany Finalizes Public Sector Tariff Agreement with Wage Increases and Flexibility

The deal secures phased pay raises and improved benefits for over 2.5 million workers, but municipalities warn of severe financial strain.

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Bundesinnenministernin Nancy Faeser und Verdi-Chef Frank Werneke stehen an Mikrofonen vor einem blauen Hintergrund und verkünden die Einigung im Tarifstreit für den öffentlichen Dienst von Bund und Kommunen

Overview

  • The agreement includes a two-stage wage increase: 3% or at least €110 monthly starting April 2025, and 2.8% starting May 2026.
  • Additional benefits include higher shift allowances, an increased 13th-month salary, and flexible work options, such as trading pay for extra vacation days.
  • Municipalities face significant financial challenges, with Saxony alone estimating €820 million in additional costs by 2027.
  • The deal prevents public sector strikes for 27 months, ensuring labor stability until March 2027.
  • State employees, including teachers, are excluded from this agreement, with separate negotiations scheduled for autumn 2025.