Germany’s Mini-Job Exception on the Chopping Block as Commission Recommends Full Pension Coverage

Germany proposes scrapping mini-job pension exemption for millions and extending fixed-term contracts up to 48 months, sparking backlash from unions and industry.

A major shake-up of Germany’s labour market is taking shape, one that would strip millions of mini-job holders of their special status and simultaneously give employers far more leeway to hire workers on fixed-term contracts. The twin proposals, now under political debate, have drawn sharp reactions from industry, unions and state leaders.

At the heart of the mini-job reform is a recommendation by the Alterssicherungskommission (Pension Security Commission) delivered in June. It calls for scrapping the exemption from compulsory pension insurance for almost all mini-job employees. Only school pupils would be spared. Employers, who currently pay a flat-rate contribution of about 31 percent for mini-jobbers, could see that figure rise to as much as 39 percent. The commission argues that eliminating the exemption would strengthen workers’ pension entitlements.

The monthly earnings threshold for mini-jobs already rose to 603 euros at the start of this year, up from 556 euros the year before. The adjustment is linked to a 10-hour weekly workload at the current national minimum wage of 13.90 euros per hour. Household helpers enjoy a reduced employer contribution of 12 percent.

IAB director Joachim Fitzenberger has floated an alternative: a de minimis threshold of 250 euros to keep very small jobs light on bureaucracy. But the commission’s core proposal remains the more drastic option, affecting between 6.5 million and 6.9 million mini-jobbers nationwide. Sectors such as retail, hospitality, agriculture and crafts would feel the biggest impact; Hesse alone counts over 600,000 mini-jobbers.

Opposition is already vocal. DEHOGA president Guido Zöllick warned that restricting mini-job flexibility could make it harder to fill evening and weekend shifts in the hospitality industry. Bavaria’s minister-president Markus Söder flatly rejected any abolition of the special status. Meanwhile, unions including Verdi and the DGB have criticised the separate reform of fixed-term contract rules.

That reform, running parallel to the mini-job changes, would allow employers to offer fixed-term contracts without a specific reason for up to 48 months, with as many as six renewals. The current limit is two years with three renewals. The new rules would apply to new hires and be capped until the end of 2030. Further labour-law changes include the removal of the written-form requirement for employment contracts as of 1 January 2027. Employers would also gain the right to demand a medical certificate from the first day of illness, instead of the current fourth day without a separate agreement.

For students and seasonal workers, existing rules remain largely intact. Werkstudenten (working students) who stay under 20 hours per week during term time keep their exemption from health, care and unemployment insurance contributions. Short-term jobs, such as holiday work, remain social-insurance-free as long as they last no more than three months or 70 working days per year. The tax-free basic allowance for 2026 stands at 12,348 euros, meaning many students can reclaim any income tax paid via their annual return. BAföG recipients face a separate earnings limit of 6,672 euros per year.

A YouGov poll indicates that more than half of respondents oppose the loosening of fixed-term contract rules. With stakeholders on all sides digging in, the government faces a delicate balancing act between pension security, employer flexibility and the protection of workers’ rights.