Looking to the Second Half of 2026 for the Public Service: What’s Next for the Federal Nutrition Act? Three wage cases are pending before the Federal Constitutional Court. With elections coming up in three states, the coalition’s reform agenda will continue. TVöD also has new rules for the annual special payment.
TVöD: Increase in annual special payment and new exchange days in public service
New rules for annual special payments for federal and local government employees come into force this year. Federal and local government values increase and are usually paid with the November salary for the first time. Also for the first time there is a sharing model. Employees can convert a portion of their special pay this year to have more time off next year. If you want this, you should take action in the coming weeks. Employees must submit an exchange request to their employer by September 1. The Federal Ministry of the Interior has published a circular on this matter (see sources below).
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TVöD: The annual special payment increases significantly
Starting this year, federal employees received an increased annual special payment: 95 percent of monthly salary in pay groups 1 to 8, 90 percent in groups 9a to 12 and 75 percent in groups 13 to 15. In the municipal sector (MSA), there is now a single tax rate of 85 percent for all pay groups. Separate rates apply in hospitals and nursing and care facilities (BT-K and BT-B): where pay groups 1 to 8 now receive 90 percent, groups 9a to 15 receive 85 percent. Nursing home employees do not benefit from the new election model, but their special payments are higher.
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Time instead of money: up to three days off
The 2025 collective bargaining agreement is based on a “time over money” election model. As of January 1, 2026, federal employees were able to convert a portion of their annual special pay into up to three additional days off under Section 29a TVöD. If you want this, you must explain this to your employer in text form by September 1, 2026—an email is sufficient. Exchange days will be available next year, for the first time in 2027. Many municipal employees will also be able to use this model. GEW calculates that the day off costs about 5.4 percent of the annual special payment. A prerequisite is the requirement to receive at least five twelfths of the special payment.
Overdue days don’t cost any money
Important for employees: According to the BMI circular, if you do not take exchange days, you will not lose any money. The employer compensates for financially overdue days no later than March 31 of the following year. In the event of confirmed illness or if the employer cancels the approved day for business reasons, the exchange day may be rescheduled throughout the year.
Civil Service Preview: When will the Federal Nutrition Act reach Cabinet?
The most important open question in the second half of 2026 concerns federal government employees. The draft Federal Nutrition Act has been voted on by the department since April 14, and no cabinet appointments are in sight. The main point of contention remains the fictitious partnership income in the form of the minimum wage, which the DGB and DBB consider unconstitutional. There are many reasons to believe that the project will at least be revised.
This is a lot of money for employees: the project provides for additional payments until 2021, for example, in the form of an additional family allowance. If the law comes into force in 2026, it should pass through the Bundestag and Bundesrat in the fall. Until then, the 3.0 and 2.8 percent increases will continue to be considered a deduction. In addition, Karlsruhe may intervene again: further wage proceedings are expected in the Federal Constitutional Court, including in Bremen, Saarland and Schleswig-Holstein (see below).
Civil service: final laws on public salaries approaching
Payment of wages in 2026 is entering its final phase. Brandenburg presented its bill to the state parliament at the end of June, and a resolution is just around the corner. Mecklenburg-Vorpommern wants to pass its law before state elections in September, but so far only one announcement has been made in Bremen. Lower Saxony must supplement the increase measures for 2027 and 2028 with a second law. And Berlin is under time pressure: the capital must restore salaries in accordance with the constitution by March 31, 2027.
Wages in Bavaria: civil servants will receive more money from October 2026
While many countries have increased wages since April 1, Bavaria is taking a special approach. The Free State is delaying the extension of the collective agreement by six months: the first increase of 2.82 percent will not occur until 1 October 2026, with further steps to follow on 1 September 2027 and 1 January 2028. Bayern will not cover the minimum amount of 100 euros; instead, the volume will go into linear control, which is 0.02 points higher. As such, the state government is abandoning its decades-long practice of simultaneous transfers, with Finance Minister Albert Furaker pointing to a tight budget situation. The Bavarian Civil Service Association strongly criticizes the delay and warns of a constitutional risk. After all: According to the decision of the Council of Ministers on May 19, the salary increase must begin in October, pending legislation, since the state parliament has not yet passed the adjustment law. This decision is also expected to be made in the second half of the year. To the current salary table in Bavaria 2026…
A glance at Karlsruhe: payroll procedures in three countries are planned for 2026
The main problem that led to unconstitutional wages arose about 20 years ago: with federalism reform, states took responsibility for paying their government employees. Since then, 17 salary systems have diversified, with their own bonuses, career paths and assistance policies. And when the state budget was tight, raises were sometimes canceled. The result has been a wave of lawsuits: According to Spiegel, there are another 67 cases pending before the Federal Constitutional Court regarding wage regulation, some of which are long-standing. In North Rhine-Westphalia alone, some 100,000 employees filed objections to their pay last year, according to the Civil Service Association. Some of these cases will probably end up in Karlsruhe sooner or later.
The responsible Second Senate included several salary procedures in its annual forecast for 2026. There are no specific dates, but templates are on the list of planned solutions. We are talking about three countries: there are five reference rulings of the Bremen administrative court regarding wages for 2013 and 2014, which affect the salary scales A, C and R (references 2 BvL 2/16 to 2 BvL 6/16). In Saarland, Karlsruhe checks wages for 2011–2016 in orders A and R (see 2 BvL 11/18, 2 BvL 12/18 and 2 BvL 14/18). And for Schleswig-Holstein, salary A for 2007 is pending (reference 2 BvL 13/18 and 2 BvL 4/21). The guideline in all cases is paragraph 5 of Article 33 of the Basic Law – the principle of alimony. Even if the litigation dates back many years, each new decision tightens the standards by which federal and state governments must evaluate their current wage laws.
Coalition reform package: taxes, working hours, mandatory certification
After the summer holidays, the Union-SPD coalition wants to continue reforms. In early July, the coalition committee agreed on a package of 34 measures that should be enshrined in law in the fall. From 1 January 2027, the basic tax credit, child tax credit and child benefit are set to increase and the top tax rate cap moves. Amount of assistance: about ten billion euros. In labor legislation, the coalition plans to replace daily maximum working hours with weekly maximum working hours. And with sick leave it will be stricter: a certificate must be required from the first day of illness, and sick leave over the phone will no longer be needed.
Pension: Legislative package should be adopted by the end of the year
At the end of June, the Senior Safety Commission presented 33 recommendations that the coalition now wants to implement. The Bundestag is due to discuss the pension package after the summer holidays and adopt it before the end of 2026. Particularly relevant for civil servants: some aspects of the compulsory pension reform should be transferred to civil servant pensions, and the retirement age should be linked to life expectancy. However, the Commission does not recommend transferring civil servants to pension insurance.
Health and Care: Contributions, Federal Council, Cabinet Office.
The first decision was made on the issue of health insurance: on July 10, the Bundestag adopted the Law on Stabilization of Compulsory Health Insurance Rates. The project’s goal is to stabilize additional contributions by linking spending in all areas of the health system to revenue growth. For public sector employees, it is about the network, because without a brake there is a risk of higher contributions. The limitation on compensation increases also affects municipal hospitals and nursing facilities as employers.
September elections: three new state parliaments
Saxony-Anhalt will elect a new state parliament on September 6, followed by Berlin and Mecklenburg-Vorpommern on September 20. On September 13, elections to local councils will be held in Lower Saxony. The results will change the composition of the Federal Council and help decide who determines salaries, staffing and administrative policies in the three states in the future.
Ahead of the New Year 2027: Minimum Wage Increase, TVöD Collective Bargaining Round to Start in April
From 1 January 2027, the statutory minimum wage will increase from 13.90 to 14.60 euros, and the mini-work limit will increase to 633 euros. At the same time, in the fall the Bundestag will discuss the budget for 2027, which is short of about 20 billion euros. How much money is left for staff and administration will be decided at these consultations. And: In the spring of 2027, public sector employees in federal and local governments will discuss demands for the upcoming round of TVöD collective bargaining in 2027. The German Civil Service Association provided us with a schedule upon request. Subscribe to our newsletter.
Sources
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