Manuela Schwesig said on Friday that mothers and fathers with children under the age of three should not work the current 40-hour week.
“I want both parents to reduce the amount of time they work,” the Social Democrat (SPD) minister told Bild. "The economy must be more flexible and give parents, who reduce their working hours for their family, good career opportunities."
It would mean parents cutting their working time by 20 percent and the state making up the difference in lost wages through a "family allowance".
Schwesig, who has a six-year-old son, said she had the support of her SPD colleague and Employment Minister Andrea Nahles.
But according to the Berlin-based German Institute for Economic Research (DIW) the plan from the centre-left SPD would cost taxpayers €140 million a year.
The legislation would also need the support of the centre-left SPD's Conservative coalition partners. But head of the Christian Democratic Union (CDU) economic council, Kurt Lauk, described the plan as an “misguided”.
CDU politician Michael Fuchs added: "I am asking myself where the money will come from," the BZ newspaper reported.