The contemporary debate over the importance of "works" is about neither Jewish ritual observance nor indulgences. When theologians use the term "works" today, they mean good deeds, like helping the poor. The question active today is what the relationship between good works and faith is.

Are Protestants and Catholics on opposing sides in the "faith vs. works" debate?
They used to be, to some extent. In 1999, a committee of theologians hammered out a joint Lutheran-Catholic declaration on the subject, reconciling what had previously seemed to be opposing views. However, the questions debated still have relevance in the lives of Christians today.