Only 44% of German Private-Sector Workers Get Holiday Pay, WSI Study Reveals as Courts Reshape Vacation Rules
17.06.2026 - 00:42:35 | boerse-global.de
A new analysis from the Hans-Böckler-Foundation's Economic and Social Science Institute (WSI) shows that holiday pay remains a rare perk in Germany. Covering May 2025 to May 2026, the study found that just 44 percent of private-sector employees receive an extra vacation bonus on top of their regular salary.
The disparity largely tracks with collective bargaining coverage. Among workers covered by a tariff agreement, 73 percent get the payment. In non-unionised workplaces, that figure drops to 35 percent. The actual sums vary wildly: in Mecklenburg-Western Pomerania's agricultural sector, the average is around 186 euros, while workers in wood and plastics processing in Westphalia-Lippe can receive up to 2,904 euros.
Regional and gender gaps are just as stark. In western Germany, 46 percent of employees receive holiday pay; in the east, only 33 percent do. Men are more likely to benefit (49 percent) than women (38 percent).
While the financial side of vacation is a lottery, recent court rulings have strengthened the legal framework around when and how holiday entitlements are earned and used.
The European Court of Justice (ECJ) has expanded workers' rights in two important ways. First, in its 2014 Bollacke decision, it confirmed that the right to compensation for unused vacation does not die with the employee. That claim is inheritable and passes to the heirs. National rules that extinguish it on the worker's death violate the European Working Time Directive.
Second, the ECJ struck down a French law requiring a minimum of ten days' actual work before any vacation entitlement accrues. The ruling has particular significance for employees who suffer long-term illness after an accident: their holiday claim remains intact even if they never return to work.
Germany's Federal Labour Court (BAG) has clarified a separate issue for phased-retirement workers. Employees who use the "block model" – working full-time during an active phase followed by a passive, paid-leave phase – cannot claim compensation for unused vacation from the passive period after their contract ends. The court reasoned that because no work obligation exists during the leave phase, no statutory vacation rights arise. A September 2019 ruling had already established that when a worker switches from the active to the passive phase within a calendar year, the vacation entitlement must be calculated proportionally by time segments. This applies to contractually agreed extra vacation days too, unless individual agreements state otherwise. In the case at hand, an employee worked until the end of March 2016 and then stayed on paid leave until July 2017. No new holiday rights accrued during that leave period.
Employers also face limits on how they schedule vacation. The Thuringia State Labour Court (LAG Thüringen) ruled in March 2026 that a company-wide rule capping consecutive holiday at two weeks is invalid. Workers generally have a right to longer, continuous rest periods. Only urgent operational reasons or personal circumstances can justify a rejection – a mere "company practice" is not enough.
While German courts are fine-tuning vacation law, Austria is taking a budgetary axe to one of its own retirement instruments. The government plans to slash spending on phased-retirement subsidies from 600 million euros to 200 million euros by 2029. The cap for the assessment base for phased-retirement pay will be set at 5,200 euros per month, and a proposed increase in the replacement rate from 80 to 90 percent has been scrapped. The measures are part of a 200-million-euro package of labour-market savings.
