Logistics companies that outsource deliveries to third-party subcontractors would be forced to ensure that subcontractors’ drivers are paid social security contributions, in a new law drafted by the German government.
Companies would be liable in the event that their subcontractors don’t make the proper payments.
The approved draft law was proposed following nationwide investigations into delivery firms who had subcontracted drivers working off the books, thereby committing social security fraud.
“Sub-sub-sub contractors are working in many areas. Wages are being pushed down and social insurance contributions are not being made and we won’t put up with this any longer,” said Labour Minister Hubertus Heil, who also referenced the exploitation of immigrant labour.
Heil cited the Deutsche Post DHL Group as an example of a company that ensures employees are paid appropriately.
“This company shows that you can do it in a decent way. Workers here are permanently employed, with proper social insurance, decent working conditions and fair wages.”
DHL is notable for its limited use of subcontractors. However, most parcel delivery and logistics companies, including Amazon, rely on them to manage a growing number of parcel deliveries as e-commerce booms.