At the end of March 2000, the collective bargaining parties in the west German construction industry concluded new collective agreements regarding pay increases, additional pension schemes, partial retirement and the fight against illegal employment on building sites.
On 30 March 2000, the construction workers' trade union IG Bauen-Agrar-Umwelt (IG BAU) and the sector's two employers' associations, Hauptverband der Deutschen Bauindustrie (HDB) and Zentralverband des deutschen Baugewerbes (ZDB) concluded new collective agreements for about 780,000 employees in the west German construction industry. The new construction agreements include the following provisions:
- pay increases. The pay agreements provide for a 2% increase in wages and salaries from 1 April 2000 and a further 1.6% increase from 1 April 2001. Altogether, the pay agreements run for 24 months. Originally, IG BAU demanded an increase of 4.8% for the year 2000;
- increase of minimum wage. Minimum hourly wages in construction industry will increase by 2% from DEM 18.50 to DEM 18.87 from 1 September 2000 and by 1.6% to DEM 19.17 from 1 September 2001. Both parties agreed to ask the Ministry of Labour for the extension of these agreements on increased minimum wages to cover non-organised employers and employees;
- additional pension scheme. From 1 April 2000, the existing "capital-forming payments" may be used for the financing of additional pension payments. If an individual employee wishes to use the monthly capital-forming payments of DEM 78 for additional pension contributions, the employer must contribute DEM 60 and the employee DEM 18 per month to an industry-wide additional pensions fund. Both IG BAU and the construction industry employers' associations have calculated that the estimated payments to the additional pension scheme will be equivalent to 0.6% of overall paybill;
- partial retirement. The existing agreements on partial retirement have been revised in anticipation of the forthcoming changes to the Partial Retirement Law (Altersteilzeitgesetz). Construction employees will have the opportunity for up to six years to use the so-called "block model", under which employees continue to work full time for the first half of their partial retirement period, and then stop working in the second half; and
- joint initiatives against illegal employment on building sites. In order to fight against illegal employment on building sites, the collective bargaining parties agreed on the introduction of a so-called "Bau-Card" for every employee in construction. The "Bau-Card" will carry a photograph of the employee and an electronic chip in order to facilitate controls against illegal employment on building sites.
On 15 April 2000, the collective bargaining parties concluded further agreements for the collective bargaining area of Berlin. These agreements provide for a 1% pay increase from 1 April 2000 and a further 1.6% pay increase from 1 June 2001. Furthermore, the west German agreements on partial retirement were adopted and an additional pension scheme with slightly lower contributions than in west Germany was also agreed on. No agreement has so far been reached for the remaining east German bargaining districts. While the unions demanded that at least the provisions of the Berlin agreement should be adopted, the employers called for a wage freeze, referring to the difficult situation in the east German construction industry.