In general, companies whose working conditions are not standardized and which employ a small number of employees prefer to conclude individual employment contracts with their employees. There are two legal mechanisms to extend the results of collective agreements to all employers in the same sector, beyond the signatory parties, although the rules in this area have changed considerably in recent years, with the original renewal mechanism having been almost entirely replaced. On the contrary, it is collective bargaining at sectoral level between the various trade unions and employers` organisations that remains the central arena for setting wages and conditions in Germany. Separate agreements between trade unions and companies are less widespread, although there are some exceptions (e.g.B. the agreement on the Volkswagen automobile group), and they are more often found in the former GDR (see below). The United States recognizes collective agreements    The traditional mechanism of generalizing existing collective agreements is subject to a number of conditions. This implies that the agreement to be renewed should cover at least 50% of workers in the sector and that employers and trade unions should cover those directly covered. With the decline in the coverage of negotiations (see below), this mechanism is less widespread. During the summer of 2019, the website of the Ministry of Labour (BMAS) indicated that “at that date, only 443 (0.6%) of the approximately 73,000 registered collective agreements, covering a wide range of collective agreements other than payment, were currently universally binding and that the list of generally binding agreements had been revised. It has been argued that small unions have gained disproportionate influence in recent years. This development is seen as a direct result of the 2010 judgments of the Federal Labour Court, which put an end to the principle of tariff unity, which has existed for more than 60 years. These rulings gave smaller unions more rights to challenge the established system, which had only one agreement for a given company. Several DGB unions feared that the professional categories that would benefit most from the strikes would renounce the principle of solidarity.
For their part, employers feared that companies would face permanent turbulence, as some collective agreements could disappear permanently. German collective agreements govern a wide range of subjects. In addition to remuneration, the agreements also deal with issues such as shiftwork allowances or wage structures, working time, the treatment of part-time workers and training. Under constant pressure from trade unions, a minimum wage has been in force in Germany since 1 January 2015, although sector-level collective agreements that pay less than the minimum wage were valid until 1 January 2017. Trade unions have also been able to make progress on a central theme of collective bargaining: from 1 January 2020, social and educational service workers in the Länder will work under the same wage conditions as their federal and local colleagues.