Large employers in Germany are required to hire people with disabilities – or pay a penalty. But they can avoid the fine with a trick. For the first time, we show exactly how companies save millions of euros – and where the money goes

“I would like to work in a library. Or read to elderly people.” These would be good jobs for Ing Han Ong. But instead, the 45-year-old sits at a white wooden table every day. He folds cardboard boxes and puts a needle, a plaster, and a note for a vitamin D test inside. 200 times a day. For the past four years. Ong works in a workshop for people with disabilities in Hamburg. He packages the tests for the healthcare company Cerascreen. There, he earns 260 euros of pocket money per month, for about 30 hours of work each week. 

Ing Han Ong’s situation is similar to that of many of the more than 300,000 people working in workshops for people with disabilities in Germany: they earn very little money for their work, and many live below the poverty line.

Outside the workshop system, Ong would earn more money, and he would not depend on social benefits. But the general job market is not inclusive. There are very few jobs for people with disabilities. And even those who do find work face additional obstacles in the open job market. Structural barriers, uncertainty, bullying, and harassment at the workplace are part of everyday life for many people with disabilities.

To help more people with disabilities enter the general job market, there is a rule in Germany: companies with 20 or more employees must allocate at least 5 percent of their jobs to people with disabilities. If companies do not hire enough people with disabilities, they must pay a penalty: the compensation levy.

This rule is meant to make it easier for people like Ong to access the German job market. But in 2023, most employers did not hire enough people with disabilities. More than 100,000 employers had to pay the compensation levy. And the law allows them to use a trick that helps them save money – or avoid the levy completely.

This joint investigation by andererseits, Süddeutsche Zeitung, and FragDenStaat shows for the first time how big the problem is: it involves many millions of euros that should actually support people with disabilities. Instead, the money is used to support workshops for people with disabilities – even though, according to the United Nations, these workshops in their current form violate human rights.

The cost-saving trick

The trick is simple: if companies have hired too few people with disabilities, they can give contracts to workshops for people with disabilities and save part of the compensation levy. They can offset up to half of the money they pay for the work done in the workshops.

Many employers in Germany use this trick – and they save a lot of money. In 2022, they saved about 84 million euros. Employers in Berlin are not included in this figure. That means 84 million euros went into supporting the workshop system – and not into measures that promote inclusion in the open job market. With that money, around 20,000 office workplaces could have been made wheelchair-accessible. Or several thousand personal workplace assistants could have been paid for a whole year.

In 2022, employers in Thuringia saved the most. In Bremen, they saved the least through this trick. In federal states with particularly large numbers of companies, millions of euros flow directly into workshops for people with disabilities – in Bavaria, for example, more than 14 million euros in 2022.

If employers give enough contracts to workshops, they do not have to pay the levy at all. In Bavaria, in 2022, almost 2,500 companies were able to reduce their compensation levy to zero. That was almost one in ten companies that would otherwise have had to pay the levy.

This does not only mean that companies save money. It also means that less money flows into the compensation levy. This levy is like a pot of money that is supposed to be used for inclusion. If companies pay less into it, then less money can be spent on inclusion.

Part of the money from the compensation levy goes to the Federal Employment Agency. It uses the funds to provide support for people with disabilities in the job market. Most of the money remains with the integration offices of the individual federal states. They use it, for example, to pay for inclusion projects or workplace assistants. However, about 3 percent of the fund also goes directly to workshops for people with disabilities. In 2022, that was almost 15 million euros. This means that even the money from the compensation levy is used to support non-inclusive structures.

The job market is not inclusive

What companies save on the levy is, for many of them, only a small amount, says Ulrich Scheibner. He used to lead the Federal Association of Workshops. Today, he is one of the strongest critics of the workshop system and the compensation levy. He says the reasons why employers use the trick are not primarily financial. Instead, they often fear that creating inclusive workplaces would require too much effort. Many still have prejudices.

The inclusion researcher Gudrun Wansing confirms this: “Just because someone has a so-called severe disability does not automatically mean they are not qualified or not capable. Unfortunately, this is often claimed.”

Ing Han Ong experienced this himself. For five years, he had an external placement at a supermarket in Hamburg. This means he worked in the open job market, but unlike his colleagues, he was officially still employed by a workshop. It paid him 395 euros a month. He did not receive an employment contract. He stocked shelves and checked whether food was still within its expiry date. Not his dream job, Ong says, but he had managed to make the transition from the workshop for people with disabilities into a regular company. Until his supervisor complained that he worked too slowly. At first, she said this behind his back to other colleagues, Ong recalls; later, she criticised him directly. It simply wasn’t possible to work any faster, Ong said. “She did a bit of bullying, she was kind of against me—against disabled people,” says the 45-year-old. 

After five years at the supermarket, he quit. Not only because of weekend work, but also because he was treated badly. Unfortunately, Ong says, it is often the case that people trample on people with disabilities. “We are all just human, and even people without disabilities make mistakes sometimes.”

Today he is back in the workshop. His pocket money is also financed through contracts with workshops. Ong does not think it is right that companies profit from his daily work: “It does feel a bit like exploitation.”

What Ong experiences at work every day has a big effect on his self-esteem, says Gudrun Wansing: “For people with disabilities, it makes a difference whether they walk through the gate of a company in the morning and are part of a workforce, or whether they are picked up from their home by a transport service and driven to the workshop.”

And yet, less than half of companies in Germany hire enough people with disabilities. Even public-sector companies struggle with inclusion. Public companies work for all people in Germany, yet they, too, save a lot of money through contracts with workshops. In some federal states, public companies save much more than private ones. For example, in Thuringia, public-sector companies saved a quarter of the compensation levy in 2022 through workshop contracts, while private companies saved less than a fifth.

The Federal Association of Workshops does not see it as a problem that companies can save the compensation levy through such contracts. It sees it as an important “compensation for disadvantages” in the market.

Exclusion is sold as inclusion

Packaging, cigarette paper, fuel caps – most people have already handled items made in workshops by people with disabilities. Very few knew this at the time. There is no requirement to label products as such.

The fact that so many companies award contracts to workshops is also due to a misunderstanding: many believe—or act as if—working with workshops is good for inclusion. The healthcare company Cerascreen, for which Ong folds cardboard boxes every day, wrote in response to our inquiry that it wants to contribute to an inclusive working world: “We are proud of this partnership and see it as an example of how business and inclusion can go hand in hand.”

And even at Lufthansa, one of the largest employers in Germany, they advertise a form of inclusion that isn’t really inclusion at all. In 2024, the Lufthansa Group hired too few people with disabilities. “The Lufthansa Group therefore also uses other ways to support people with disabilities, such as awarding contracts to workshops for disabled people,” their press office told us.

Instead of hiring enough people with disabilities, the Lufthansa Group gives contracts to workshops where people only earn pocket money. These contracts benefit the company twice over: in response to our inquiry, Lufthansa wrote that its companies make use of the option to offset these workshop contracts against the compensatory levy.

And so, inclusion in the job market progresses very slowly.

A study by the Institute for Employment Research shows that some employers deliberately hire fewer staff. More employees also means an obligation to hire more people with disabilities: for example, a team of 39 people requires only one such person, but a team of 40 people requires two. In another study, three-quarters of all surveyed employers said they could not find suitable applicants with severe disabilities.

Workshop critic Scheibner doubts this: “This is usually just an excuse.” He says that the supposed lack of suitable applicants is actually due to conditions in the company. These conditions must change. Anyone can work well – if their individual needs are considered. 

For Ong, this means a calm working environment and a clear structure of tasks. Too many tasks at once confuse him, he says. A precise plan would help him complete his work independently.

What politics could change

“We do not have a legal problem,” says Wansing. There are enough government measures to support inclusion, they are just not used enough. For example, making a workplace accessible or providing personal assistants. Or the “Budget for Work.”

With the “Budget for Work,” workshop employees can practice the transition into the general job market. The government pays companies up to three-quarters of the employee’s salary. In addition, workplace assistance is provided. Yet fewer than 1 percent of workshop employees actually move from workshops into the general job market.

Politicians have also recognised that workshop contracts from companies could play a role. The previous German government wanted to abolish the rule that allows companies to save money through workshop contracts. But that did not happen: the government dissolved prematurely at the end of 2024. The new government under Chancellor Friedrich Merz has so far made no new plan on the topic.

In response to an inquiry, a spokesperson from the Ministry of Labor and Social Affairs wrote that it must now be examined whether the measures will be addressed in the future, including the planned abolition of the rule allowing workshop orders to count toward the levy.

For Ing Han Ong, this change would only be a first step in the right direction. Besides changing the system, a change in mindset is also needed. After his bad experiences in the general job market, he has had enough for now. He would only go back if there were people there with knowledge of disabilities and who show understanding so that he is not treated as poorly as he was in the supermarket. Until then, he mainly wishes for a higher salary than the 260 euros per month he earns in the workshop. “Unfortunately, meals are deducted from that,” he says. When asked, his employer Cerascreen describes the work in the workshops as “meaningful, fairly paid employment.”

Further Credits:

  • Illustrator: Charlotte Wanda Kachelmann
  • Fact-Checking: Emil Biller
  • Produktion: Lisa Marie Lehner
  • Data: Fin Hametner
  • Accessibility testing: Sandra Schmidhofer, Artin Madjidi, Luise Jäger
  • Infrastructure: Clara Porak, Lukas Burnar
  • Proofreading: Bianca Riedmann
  • Social Media: Ramona Arzberger
  • Communication: Victoria Nunez Oviedo, Lena Riedl