German Government Plans to Extend Fixed-Term Contracts to Four Years

The German federal government intends to broaden the use of unjustified fixed‑term contracts, allowing newly hired employees to be employed on temporary terms for up to 48 months with as many as six extensions. The reform, slated to run until the end of 2030, seeks to increase labor market flexibility but has sparked criticism from trade unions.

Union leader Frank Werneke of Verdi warned that the measure shifts employment risk onto workers, creating prolonged job insecurity, heightened stress, and delayed personal decisions such as having children, buying homes or getting married. Analysts note that the policy could especially affect young workers and women, potentially exacerbating Germany’s demographic challenges.

The proposal replaces the current limit of two years with a maximum of four, raising concerns about the long‑term stability of the workforce while the government frames the change as a boost to employment.