German Government Moves to Reward Longer Hours with Tax Cuts as 4,000 Rally Against Reform

Merz administration plans tax-free overtime and bonuses for part-timers, but critics warn of 13-hour workdays and cuts to health care. Protests erupt nationwide.

The Merz administration wants to make extra work financially appealing. On 3 June 2026, the cabinet adopted a declaration of intent within a national tourism strategy that lays the groundwork: overtime premiums would become tax-free, and part-time employees who increase their hours could receive a one-time bonus. The plan is flanked by an income-tax reform scheduled for 1 January 2027.

Yet the political push has already ignited street-level opposition. More than 4,000 people demonstrated on 4 June 2026 across 14 cities under the banner “Es reicht!” – “Enough!” – against the government’s direction. The anger targets not only the planned relaxation of daily working-time limits but also proposed cuts in health and long-term care. A week of nationwide protests is set for 6–13 June 2026.

Trade unions have been the loudest critics. On 4 June 2026 the German Trade Union Federation (DGB) called the reform a step backward for work-family balance. A loosening of the daily cap, it warned, would allow employers to legally schedule up to 13 hours of work in a single day. The DGB’s “Good Work” index found that only 40% of employees are satisfied with their current hours; more than half want a reduction. The burden falls disproportionately on women: among those without work-life conflicts, a third report exhaustion after work, but among women facing such conflicts, four out of five say they feel burned out.

Employers, however, argue the opposite. On 5 June 2026 Jörg Dittrich, president of the Central Association of German Crafts (ZDH), proposed a multi-year trial of flexible weekly working time, calling the eight-hour day “too rigid a corset” for modern businesses. If undesirable trends emerge after two or three years, he said, the system could be corrected. Dittrich noted that the coalition agreement already envisions replacing the daily maximum with a weekly one. The Federal Crafts Association is supported by the Mittelhessen Business Association (UVM), whose chairman, Klaus-Achim Wendel, stressed that the Working Time Act no longer fits today’s world of work. Any reform, he added, must not create new bureaucratic requirements for time recording that would endanger trust-based working time models.

A concrete government bill is expected in the coming weeks. The CDU’s business wing has made its position clear: there should be no legal right to reduced hours based on lifestyle preferences.

Research on the ground suggests the public is wary of the change. An IAB survey from 2025 showed that 84% of respondents view the daily maximum working time as a necessary safeguard against overwork. Scientific studies confirm that individual productivity drops sharply after eight hours.

Meanwhile, the debate has spilled into active collective bargaining. On 5 June 2026 the Verdi union called nationwide warning strikes in the retail sector, demanding a 7% wage increase against employers’ offers of 3.4–3.5% with a significantly longer term. In local transport in Lower Saxony and Bremen, after six unsuccessful rounds of negotiations, the parties agreed to arbitration; Verdi is pushing for reductions in weekly hours and extra vacation days. In the public sector, Baden-Württemberg’s interior ministry rejected a cut in the 41-hour week for police officers, arguing that a reduction to 40 hours would require more than 600 additional positions and cost €56 million annually.

As employers stress the need for flexibility in a changing economy, worker representatives see hard-won safety protections under threat. The coming weeks of political deliberation and announced protests will determine how far the daily working-time boundary is actually dismantled.