German Labor Minister Hubertus Heil announced a new law on Saturday to combat illegal working conditions in the parcel delivery sector.

The law would force Germany's main delivery service companies to cover any failure by their subcontractors to pay the minimum wage or social insurance contributions, he said in an interview with the RND media group.

Germany's biggest services union, Verdi, welcomed the move. It has repeatedly criticized major delivery companies for failing to tackle what it says are "precarious" employment conditions at many subcontractor firms.

Verdi boss Frank Bsirske said some subcontractors used cheap labor from Eastern Europe to deliver packages, often paying them as little as €4.50 ($5.12) an hour for shifts that lasted up to 16 hours. Germany's hourly minimum wage is €9.19.

Conservatives voice support

Only two of Germany's five biggest delivery service companies, DHL and UPS, use their own employees to deliver parcels, according to Verdi. The other three companies generally use subcontractors.

But the German Parcel and Express Logistics Association (Biek) dismissed accusations that it was not doing enough to stop wage dumping. It said contracts between its members and other companies require subcontractors to pay workers the minimum wage and social contributions.

German Chancellor Angela Merkel's conservatives appear to be on board with introducing the so-called subcontractor liability rule. The Christian Democratic Union (CDU) employee council spoke out in favor of the move earlier this week.

Heil said employees in the construction and the meat industries had benefited from rule changes. He added that the regulations could apply to the parcel delivery sector as soon as the end of this year.

amp/jm (dpa, AFP)

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