New agreements concluded in construction
In April 1999, the social partners in the German construction industry reached collective agreements on pay increases, changes in bonus payments, minimum wages and the establishment of collectively agreed pension funds.
On 22 April 1999, after four rounds of negotiations, the construction workers' trade union IG BAU and the construction employers' associations, Hauptverband der Deutschen Bauindustrie (HDI) and Zentralverband des Deutschen Baugewerbes (ZDB), concluded a new collective agreement for the 800,000 or so employees in the west German construction industry. Pay will be increased by 2.9% from 1 April 1999. The holiday bonus will be increased by 30% while, in return, the Christmas bonus will be reduced from 77% to 55% of a month's pay. Minimum wages will be increased by 16% from DEM 16 per hour to DEM 18.50.
Furthermore, the parties agreed to establish a collectively agreed pension scheme (Tarifliche Zusatzrente) as a new section within the construction sector's existing pensions institution (Zusatzversorgungskasse des Baugewerbes). The new additional pension scheme will insure both employees and employers, which means that it is attractive for small and family-owned businesses. The social partners have established a commission to discuss different pension models.
On 29 April, the social partners signed an agreement for the roughly 300,000 construction employees in eastern Germany. Pay will be frozen at September 1998 levels. Vocational trainees who start training on 1 April 1999 or later will receive 10% less pay in their second and third year than at present. Minimum wages will be increased by 7.5% from DEM 15.14 per hour to DEM 16.28.
The new construction minimum wage, which now has to be approved by the Federal Ministry of Labour and Social Affairs, applies to the Posted Workers Act (DE9702202F) which governs foreign companies operating in Germany and requires them to pay the minimum wage to their workers.