Manuel Hagel, the leading CDU candidate for the state election in Baden-Württemberg, proposes exempting overtime pay from both taxes and social security contributions, exceeding the current coalition agreement which only allows for tax exemption on overtime bonuses. Hagel argues this would incentivize work, but the plan overlooks significant drawbacks. In 2024, approximately 4.4 million employees, or eleven percent of the workforce, performed overtime, with most of these hours unpaid. Only about sixteen percent of employees would benefit from tax and social security-free overtime, and many of them work fewer than ten extra hours weekly. This policy could negatively impact retirement benefits, as overtime hours contribute to pension points, and potentially incentivize employers to favor overtime over new hires, especially in sectors with weaker union presence, thereby hindering job creation for the unemployed and entry-level workers. Furthermore, it could reduce revenue for social insurance funds and disproportionately benefit higher earners.