Germany's New Federal Wage Compliance Act: What Bidders on Public Contracts Must Do Now

Flexibility without discrimination remains a delicate balance

Germany's Bundestariftreuegesetz (BTTG) entered into force on 1 May 2026 and it changes the rules for every company bidding on federal public contracts.

For the first time, a single nationwide regime requires contractors to apply collectively agreed minimum working conditions to all employees deployed on federal contracts worth €50,000 or more, regardless of whether the company itself is party to a collective agreement.

The obligations run down the entire supply chain: subcontractors and temporary staffing agencies are caught, and the prime contractor carries direct liability for their compliance failures. Employees gain individual statutory claims enforceable in court. Non-compliance carries penalties of up to 10% of contract value, termination of running contracts, and exclusion from public procurement for up to three years across all contracting authorities, not just the one that found the breach.

The time to act is now, not when the enforcement authority knocks. Dr. Thomas Block, MBA and Claudia Wiesinger, act legal Germany, provides an overview of the latest developments in Personalmagazin 08/26.