After a lengthy dispute, the German government and trade unions have come to an agreement on salaries for over 2.5 million workers in the German public sector. The salary increase is expected to be an important supporting measure against high inflation.

Although at the beginning expectations were higher- especially in terms of duration and inflation compensation for part-time workers-, the agreement seems to be a positive development for the public sector personnel in Germany. The deal includes a tax-free compensation for inflation of 3,000 euros and a pay increase of at least 340 euros for all, depending on pay grade, ranging from 8 to 16 percent.

Ulrich Silberbach, President of the German Civil Service Federation (dbb), stated that negotiations with the federal government and municipalities were particularly difficult, although achieving a positive outcome. Silberbach noted that the compromise would not have been possible without the warning strikes and protests of the past months, and the commitment of colleagues.

The collective agreement affects employees in various sectors of the public sector, including federal and municipal employees, trainees, interns, and students, as well as federal civil servants and pensioners. The agreement has implications for other areas of the public sector as well.

CESI Secretary General Klaus Heeger said: “The inflation has had a significant impact on workers in Europe reducing their purchasing power and eroding their standard of living. In 2023, millions of workers in Europe cannot afford basic necessities. The recent agreement in Germany paves the way for similar initiatives in all EU Member States. We are proud of what trade unions in Germany have achieved so far and we hope that more supportive measures will follow.”

The key points of the agreement:

-A tax- and social-security-free compensation for inflation in the amount of 3,000 euros (gradual payment starting from June 2023).

-From March 1, 2024, increase in the pay scale by 200 euros (basic amount) and subsequently by 5.5 percent (adjustment of the increase amount to 340 euros, where this value is not reached).

-Apprentice and intern salaries will be increased by 150 euros at the same time.

-Contract duration: 24 months.

Background information:

Overall, more than 2.5 million employees are directly or indirectly affected by the collective agreement for the public sector (TVöD): nearly 1.6 million federal and municipal employees and other areas directly impacted by the TVöD, as well as trainees (6,350 at the federal level, 56,300 in municipalities), interns, and students in integrated dual degree programs, as well as almost 190,000 federal civil servants, applicants (16,885 at the federal level), and over 500,000 pensioners at the federal level who are supposed to benefit from the collective bargaining agreement. Indirectly, the income round also has implications for other areas of the public sector (such as the Federal Employment Agency and the German Pension Insurance).