German States End Wage Dispute with New Deal

Around 925,000 employees of Germany’s federal states are set to receive a total pay increase of 5.8 percent in several stages, with a guaranteed minimum rise of €100 per month. The agreement was reached in Potsdam after three rounds of negotiations, the collective bargaining parties for the public sector announced on Saturday morning. The deal brings an end to the wage dispute involving the federal states, with the exception of Hesse.

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According to the union Verdi and the dbb civil service association and trade union, salaries will rise by 2.8 percent from April 1, 2026, with a minimum monthly increase of €100. A further 2.0 percent increase is scheduled for March 1, 2027, followed by an additional 1.0 percent rise on January 1, 2028. Pay for trainees will increase step by step by at least €150. Allowances for shift work and rotating shifts are also set to increase.

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“At the end there is a result at the level of the collective agreement for employees in the public service of the federal government and municipalities from last year,” said Verdi chief Frank Werneke. “This ensures that state employees maintain parity with the pay level of their colleagues.”

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“Our persistence and unity have achieved the breakthrough,” said dbb chief Volker Geyer. “Of course, this is a compromise and not all of our demands could be implemented,” he added. However, the results represent “concrete and sustainable improvements.” Geyer also called for the agreement to be extended to civil servants.

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The compromise reaches the limits of what is feasible but provides the states with planning certainty across three fiscal years through 2028, said Hamburg’s Finance Senator Andreas Dressel (SPD), who led negotiations on behalf of the employers’ association of German states (TdL). The new collective agreement is set to run for 27 months.

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The previous agreement had expired at the end of October. Verdi and the civil servants’ association had initially demanded a seven percent pay increase, with a minimum monthly rise of €300.

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