Creation of the Imperial Institute for Labour Exchange and Unemployment Insurance (Reichsanstalt für Arbeitsvermittlung und Arbeitslosenversicherung) (16 July 1927)
The Imperial Institute is created as an independent, self-governing body. Due to the global economic crisis with more than 6 million unemployed persons in Germany, the support of millions of unemployed was in the fore.
Period of National Socialism (1933 - 1945)
The employment agencies and the Imperial Institute are coordinated and put under the direct control of the National Socialist rulers.
Development after 1945
The Act to Set Up a Federal Office for Job Placement and Unemployment Insurance (Gesetz über die Errichtung einer Bundesanstalt für Arbeitsvermittlung und Arbeitslosenversicherung) enacted on 10 March 1952 again determined the equal participation in self-governance of the social partners and the representatives of official bodies in addition to trade unions and employee representations.
Employment Promotion Law (Arbeitsförderungsgesetz - AFG)
After the passing of the Employment Promotion Law on 1 July 1969, the Federal Office for Job Placement and Unemployment Insurance got its name which was valid until 31 December 2003: Federal Employment Office (Bundesanstalt für Arbeit). The provision of a quantitative and qualitative balance of supply and demand on the labour market came into the fore. In addition to vocational guidance, job placement and unemployment insurance, the promotion of vocational education was assigned to the employment agencies.
Development in the former GDR
Within the framework of a planned economy in which unemployment did not (officially) exist, there also was no unemployment insurance.
On the way to the German reunification, the GDR government agencies started to create employment offices in the spring of 1990, following the model of duties and organisation in the FRG. With the Unification Treaty (Einigungsvertrag), all offices of former GDR labour administration became the responsibility of the Federal Employment Agency (BA) on 3 October 1990.
Introduction of SGB III
On 1 January 1998, employment promotion was integrated in the German Social Code as its Third Book (SGB III), which replaced the Employment Promotion Law which had been in place for 30 years and amended multiple times. A new factor is that increased self-responsibility of unemployed persons and employers is expected and the investment of labour market policy funds is strongly decentralised.
From active to activating labour market policies
Also after the change of government, the reform has been continuously promoted. Since 2002, the Job-AQTIV Act (Job-AQTIV-Gesetz) has levelled the previous regulations of SGB III. For the first time, unemployed persons are entitled to employ a private agent. Those who have not been placed after three months of unemployment can receive a Placement Voucher (Vermittlungsgutschein). Nevertheless, the placement agents of the employment agency are still in demand. The number of placement agents is increased further.
"Hartz commission" and reform of the Federal Employment Office
On 22 February 2002, the commission "Modern Services on the Labour Market" (Kommission Moderne Dienstleistungen am Arbeitsmarkt), better known as Hartz commission, was created. Its task was to make the German labour market more effective and labour administration more efficient. No two months after the Hartz commission had presented its final report, the first project groups started their work. Peter Hartz presents the first results of the governmental commission named after him in August 2002 and promises a decrease in unemployment of 50 percent in the upcoming years. It is now the government's task to form the results of the governmental commission into laws.
Hartz I to III laws come into effect
The first three laws on "Modern Services on the Labour Market" (Gesetze für moderne Dienstleistungen am Arbeitsmarkt) come into effect on 1 January 2003. They implement significant modules of the Hartz commission:
- The renaming of the Federal Employment Office (Bundesanstalt für Arbeit) into Federal Employment Agency (Bundesagentur für Arbeit) as well as its reform
- The partial deregulation on the labour market (temporary employment; mini jobs,...)
- Changes in benefit entitlement rules as well as in the organisation of the BA
The largest social reform of the Federal Republic is implemented
The largest social reform of the Federal Republic comes into effect on 1 January 2005: Unemployment assistance and social welfare benefits are combined to basic benefits for job-seekers as the "Fourth Law on Modern Services on the Labour Market". In general cases, the employment agencies and municipalities together attend to persons in need; for 69 so-called opting communities, there is a limited transitional regulation until the end of 2010 to independently attend to persons in need.
Decision of the Federal Constitutional Court in December 2007
The Federal Constitutional Court declares the mixed administration by employment agencies and municipalities as providers of basic benefit as unconstitutional