Employers in Potsdam on Friday declared the breakdown of talks between the two sides. If a solution to the wage dispute can't be reached through arbitration, Germany could face crippling nationwide strikes.
"This is not acceptable," Verdi chief Frank Bsirske told a press conference. "We did not see progress on an offer. We were told to accept an extension of the working week as a pre-condition for an improved offer."
Mediators for any future talks will be former Baden-Württemberg premier Lothar Späth and former Hanover mayor Herbert Schmalstieg.
Verdi represents more than 1.3 million workers in the public sector and is fighting to get an 8 percent increase in salary or an additional €200 ($300) per month. Authorities have proposed a five percent increase over two years, along with an extension of the work week from 38.5 hours to 40 hours.
Workers across the country in various public sector jobs, including day care workers, airport employees, waste collectors, and public transport workers ramped up pressure on employers, staging warning strikes in the last week.
Another strike in a long-running dispute between German train driver's union GDL and Germany's national railway operator Deutsche Bahn will likely start on Monday, paralyzing the country's train traffic. GDL has staged a series of warning strikes since summer, but is frustrated that agreements the union made with Deutsche Bahn afterwards have yet to be finalized.