Work and Wages
Minimum Wage
Generally, there is no national statutory minimum wage in Germany at the moment, see the so-called minimum wage law (Mindestlohngesetz (MiLoG), 11 August 2014) (see Bundestag printed matter (Bundestags-Drucksache) 18/2010(neu) and Bundestag printed matter 18/1558).
The minimum wage extends to the parties of collective agreements, but there are periods of transition (see § 24 MiLoG). Some exceptions exist for seasonal workers, youth, long-term unemployed, threshold workers and newspaper delivery persons (see § 22 MiLoG). Often, wages are determined by collective agreements. Separate minimum wages exist for temporary workers (§ 3a Temporary Employment Act) and posted workers (Posting of Workers Act), which take precedence over the rules of the Minimum Wage Law, if the minimum wage under the Temporary Employment Act is not lower than the minimum wage of the Minimum Wage Law (§ 1 III MiLoG).
Minimum wages may also be extended by government decree to a whole branch in the form of a generally binding collective agreement. A collective agreement may be extended on the request of at least one party to the collective agreement to employees and employers who are covered by its scope but who are not members of the agreement-concluding organisations, provided that a board of three representatives, each of employers’ and workers’ umbrella organisations, agrees. The agreement is extended if at least 50% of all employees are employed by employers bound by the collective agreement, and it is considered to be in the public interest (see also Bundestag printed matter 147/14). Through reforms in 2014, from 1 January 2015, the 50%-quorum is not necessary; from January 2015, a collective agreement can be extended at the joint request of the parties to a collective agreement that is generally binding.
The Act on the Determination of Minimum Working Conditions, which yet provides the possibility to set minimum working conditions, including wages, for sectors which are not, or only to a minor extent, covered by collective agreements, is to become inoperative by the so-called Tarifautonomiestärkungsgesetz from 11 August 2014.
Wages agreed to between employers and employees that do not yet exceed two-thirds of the amount in the relevant bargaining agreement are deemed unfair and void; if this is the case, payments must be made according to the relevant bargaining agreement.
The Act on Minimum Pay does not apply to Amateurs in football and other sports, who receive pay for playing, and its application to foreign truck drivers in transit operations in Germany has also been suspended.
Under the Minimum Wage Law, the minimum wage is adjusted in accordance with the resolutions of the Minimum Wage Commission, established under the Act. It is a bipartite body supported by the government with three members each from the worker and employer groups. There are also two advisory (non-voting) members from the scientific community (experts in the field). Members are appointed for a term of five years.
Violations of the Minimum Wage Law, i.e., not paying the wages or not paying the wages in time, are subject to the penalty of €500,000. There is also provision of an administrative fine of more than €2,500, which can result in exclusion from the award of public sector contracts in future.
For further information, also visit: http://www.boeckler.de/index_tariflichermindestlohn.htm#cont_17936; https://www.bmas.de/DE/Themen/Arbeitsrecht/Mindestlohn/mindestlohn.html
Source: §1(III), 22 & 24 of the Minimum Wage Law; §5 Collective Agreement Act; §4 & 7 of the Posting of Workers Act; §15 of the Act on the Determination of Minimum Working Conditions
For updated wage rates, please refer to the section on minimum wage.
Regular Pay
In accordance with §614 of the Civil Code, remuneration is payable for the performance of services; it is measured over a set remuneration period, so it is payable after the expiry of each period. Germany has no legislation concerning standard pay days in employment relationships; however, salaries are normally transferred into the employee’s account in the middle of the month or at the end of the month, as written in the employment contract or in the collective agreement.
Wages tax, solidarity surcharge and, where appropriate, church tax, and also employees’ shares of contributions for social security insurance (healthcare and pensions insurance) and unemployment insurance are principally deducted from the agreed gross pay and transferred directly by the employer to the agencies responsible. Employer is required to inform the worker, through the employment contract, the composition and amount of remuneration, including supplements, allowances, bonuses and special payments, as well as other components of pay and their due dates.
Under the Minimum Wage Law of 2014, employers are required to pay the worker the minimum wage on the agreed due date and at the latest on the last working day of the month that follows the month in which the work was performed (within 30 days of the due date). If no agreement has been reached between the parties on the due date of the payment of the minimum wage, section 614 of the German Civil Code is applicable.
When remuneration is paid, the employer must provide a statement of account in text form. The statement must at least identify the payroll period and the composition of the pay, including supplements, allowances and deductions. A fresh statement is not required if nothing has changed since the last correct statement.
Under the Minimum Wage Law, companies that operate with subcontractors are liable for the payment of the statutory minimum wage by their subcontractors.
Source: §612, 614 of German Civil Code; § 2, 1, 6, 10 of Law on notification of conditions governing an employment relationship (Nachweisgesetz); 108 of the Trade Regulation Act.
Regulations on Work and Wages
- Minimum Wage Law (Mindestlohngesetz), 11 August 2014 (BGBl I, 1348)
- Collective Agreement Act (Tarifvertragsgsetz), 25 August 1969, as amended up to 11August 2014 (BGBl. I, p. 1348)
- Posting of Workers Act (Arbeitnehmerentsendegesetz), as of 20 April 2009 (BGBl. I, p. 799), as amended up to 11 August 2014 (BGBl. I, p. 1348)
- Temporary Employment Act (Arbeitnehmerüberlassungsgesetz), as of 7 August 1972, as amended up to 11 August 2014 (BGBl I, p. 1348)
- Act on the Determination of Minimum Working Conditions (Mindestarbeitsbedingungsgesetz), of 11 January 1952, as amended up to 22 April 2009 (BGBl. I, p. 818)–expiry 11 August 2014
- Hours of Work Act (Arbeitszeitgesetz), of 6 June 1994, as amended to 20 April 2013 (BGBl. I, p. 868)
- Law on notification of conditions governing an employment relationship (Nachweisgesetz), 20 July 1995, as amended up to 11 August 2014 (BGBl. I, p. 1348)
- Civil Code (Bürgerliches Gesetzbuch), Art. 611-630, 2002 (new version), as amended up to 22July 2014 (BGBl. I, p. 1218)
