Negotiations usually take place between trade unions and employers` organisations. The agreements are legally binding for union members (usually all employees) and members of employers` organizations who sign them. Compulsory pension insurance Social security Tax payers are covered by compulsory pension insurance for the duration of their employment. This also applies to foreign employees. However, they are only entitled to benefits if they have completed the required waiting periods (legal rights to future pension payments) or if the Federal Republic of Germany has entered into a social security contract with its country of origin. For any specific questions about pension insurance, please contact the appropriate pension insurer. The same legal minimum wage for workers is 9.19 euros per hour. (From 1 January 2020, the minimum wage is 9.35 euros per hour.) Any contract or employment contract for a lower amount is partially cancelled. The minimum wage does not apply to apprentices, young people with initial qualifications or those who have received compulsory practical training in education or higher education. (These exceptions are generally assessed on a case-by-case basis.) Inter-professional agreements are generally negotiated at the regional level and not at the national level.
As a result, there are minor differences between regions. However, the main elements of the agreements, including the level of wage increases, will generally be the same in all regions. The main exception is the former GDR, where wages and/or negotiated conditions are even worse in some sectors than in the former Federal Republic of Germany, although the gap has closed over time. Wage specialists at the Economic and Social Institute (WSI), which regularly monitors developments, estimate that at the end of 2017, the average level of rates negotiated in the East was 97.5% in the West. While there were some sectors, such as banking or pressure, where there was no difference, there were others where the difference was still considerable. The agreements on hotels and restaurants, for which the main rate of the agreement for Saxony (East) was only 77.7% of the corresponding rate in the agreement for Bavaria (west) are an example.  Opening clauses allowing the Works Council to negotiate less favourable rules than those provided in the industry-level agreement to take into account the particular circumstances of their employer are seen as an important means of providing flexibility to the system. A well-known example was the Pforzheim contract signed in 2004 by IG Metall, which was later incorporated into a broader collective agreement on job security. This allows the Works Council to agree on reductions in working time and temporary wages in order to avoid redundancies. Government-funded figures from the State-funded Institute for Research on the Labour Market and Professions (IAB) show that in 2018, almost half (46%) Employees in Germany were covered by collective agreements at the sectoral level, with an additional 8% covering enterprise-level agreements, meaning that tariff coverage was 54%. This allowed 46% of workers whose terms were not set by collective bargaining, although the leaders who completed the survey on which the figures are based, said that the conditions of half (51%) uncovered workers were inspired by agreements at the sectoral level.
It is also striking that in West Germany, the proportion of conventional workers is 11 percentage points higher than in East Germany (see table).  Workers over the age of 18 receive at least 24 days of leave per year.