Conflict Erupts Over Proposed Training Contribution in Berlin

In Berlin, the city's labor and social senator, Cansel Kiziltepe, is moving forward with plans to implement a training contribution for employers amidst a growing dispute within the coalition government. This initiative aims to address the pressing issue of insufficient training positions available for young people.

Mayor Kai Wegner has publicly opposed Kiziltepe's proposal, stating that now is not the ideal time to impose a financial burden on businesses that are already struggling in a challenging economic climate. He emphasized the need for all stakeholders to focus on increasing the number of available training positions instead.

Despite the mayor's criticism, Kiziltepe's initiative is aligned with the coalition agreement established between the Social Democrats (SPD) and the Christian Democrats (CDU), which includes provisions for the training contribution should the goal of creating an additional 2,000 training positions by the end of 2025 not be met. Kiziltepe has prepared a draft law for this contribution and is initiating a comprehensive consultation process.

The proposed system would require all employers to contribute a fee based on their wage costs into a collective training fund. In return, companies that provide and fill training positions would receive financial support to offset their training expenses. The goal is to incentivize businesses to invest more in training programs.

Kiziltepe believes that this contribution could help foster a more favorable environment for training opportunities, stating that companies willing to engage in training should be rewarded, while those that have yet to invest in training programs should be encouraged to reconsider their stance.

However, the business community has expressed strong opposition to the proposal, viewing it as an additional regulatory burden during already difficult times. In contrast, the labor union Verdi has called for swift implementation of the contribution to effectively combat the skills shortage in the labor market.

The coalition agreement from 2023 set a clear objective: to establish 2,000 new training positions in Berlin by 2025. If this target is not reached, the training contribution would be legislated. An alliance formed in August 2023, comprising politicians, business associations, and unions, has set a target of 34,835 training positions by the end of 2025, building on the 32,835 positions reported at the end of 2023.

Currently, the outlook for achieving these targets remains uncertain, with experts suggesting that the likelihood of success is low. Kiziltepe has thus initiated preparations for the training contribution in anticipation of potential shortfalls, with the aim of having it legislated by summer 2026, just before the end of the legislative term.

According to Kiziltepe, the training market in Berlin is imbalanced, with only 72 training positions available for every 100 applicants, placing the city at the bottom of the national rankings. A mere 10.9% of businesses are currently offering training opportunities.

The Business Associations of Berlin and Brandenburg (UVB) have criticized the training contribution as a costly and ineffective bureaucratic measure, arguing that it would not result in the creation of additional training positions but rather increase frustration among employers. UVB's main executive has stated that the existing overregulation is already a significant barrier to economic growth in the capital.

Conversely, a representative from Verdi has argued that now is the right moment to advance this legislation to effectively address the skills crisis.

While proposals for training contributions have been intermittently discussed across Germany for decades, the concept was recently adopted by Bremen, where the current contribution rate is set at 0.27% of a company's gross wage expenses. Bremen also offers compensation of EUR2,250 per trainee per year to incentivize businesses to take on apprentices.

In Berlin, the anticipated contribution rate is estimated to be between 0.1% and 0.4% of gross wages, depending on the amount of reimbursement available to employers per trainee. The specifics of both the contribution and reimbursement amounts are yet to be determined by the Senate.

Employers will be required to report their gross wage amounts and the number of training positions they have available, with penalties for non-compliance. Certain sectors, such as construction and chimney sweeping, that already have similar systems in place will be exempt from this new contribution.