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Holidaymakers on the north beach of Norderney: Those who work under collective bargaining agreements have a good chance of receiving holiday pay

Photo: Hauke-Christian Dittrich / dpa

June is the month in which many companies pay holiday pay. However, only less than half of employees in the private sector can enjoy this special payment. Their share has risen only slightly this year to 47 percent, according to an evaluation by the Economic and Social Research Institute (WSI) of the Hans Böckler Foundation. In 2022, the figure was 46 percent.

According to the WSI, the question of who receives holiday pay depends on various factors. For example, employees in companies bound by collective bargaining agreements (74 percent) in particular receive this payment. In companies without a collective agreement, the figure is only 35 percent, according to the data. The regional differences are also large: In eastern Germany (34 percent), holiday pay is still paid much less frequently than in western Germany (49 percent). And in the West, holiday pay is still higher in many industries.

For the analysis, the data of almost 60,000 employees from the period from the beginning of May 2022 to the end of April 2023 were evaluated. The data is based on the WSI online portal Lohnspiegel.de – a continuous online survey of employees in Germany. It is not representative, but according to the WSI, due to the high number of cases, it allows detailed insights into the remuneration actually paid and the frequency of special payments. Employees in the public sector, for whom the holiday and Christmas bonuses have been combined in a single annual special payment since the collective bargaining reform of 2005, were not taken into account.

Payment used for everyday life instead of long-distance travel

Another important factor, according to WSI, is the size of the company: the larger, the more likely it is to receive holiday pay. Presumably also because collective agreements apply more frequently in large companies. The institute also finds significant differences between the sexes: While half of all men (50 percent) work in companies that pay holiday pay, only 41 percent of women receive a corresponding special payment.

A high monthly income also increases the chances of receiving holiday pay. Low-income earners with a gross monthly wage of less than 2300 euros receive only 38 percent, in the higher pay groups it is almost half.

This can be difficult from a socio-political point of view. "Originally, the collectively agreed holiday pay, which has been introduced in many industries since the sixties, was intended to enable more employees to take annual leave," says Thorsten Schulten, head of the WSI collective bargaining archive. "At the moment, on the other hand, holiday pay is likely to be more of a welcome buffer for many employees to bear the high burdens caused by the sharp rise in the cost of living." The fact that employees in the low-wage sector are "once again among the losers" when it comes to holiday pay, Schulten said, is all the worse in view of this.

The amount of the collectively agreed holiday pay varies greatly depending on the industry: Employees in the middle remuneration group will receive between 180 and 2686 euros this year as collectively agreed holiday pay. Employees in agriculture and the hotel and restaurant industry receive the least holiday pay. Employees receive the highest payments in the wood and plastics processing industry, the paper processing industry, the metal industry, the printing industry, the automotive industry, the insurance industry, the retail trade, the construction industry and the chemical industry, among others.

Compared to the previous year, the collectively agreed holiday pay has increased in 8 out of 22 of the sectors examined here. In the iron and steel industry, there is no separate collectively agreed holiday pay, as it is combined with the Christmas bonus to form a uniform annual special payment. There is also no collectively agreed holiday pay in the banking industry and in some sectoral collective agreements in the energy industry.

Apr