Newsletter re the minimum wage
February 2015
valid as of 01.01.2015 under the Minimum Wage Act (MiLoG)
The minimum wage is a statutorily defined amount, to which every
worker in Germany is entitled. This wage is EUR 8,50 per hour gross from
01.01.2015 onward.
A transitional period of up to two years applies to some commercial sectors.
Provisions applicable under collective wage agreements remain in force
until 31.12.2016, even if they differ from the statutory minimum wage. As
of 01.01.2017, the statutory minimum wage enjoys unlimited nationwide
application.
Content of this newsletter
1. Who receives the minimum wage?
2. New record keeping requirements for business owners
3. The working time account
4. Payment date of the minimum wage
5. Regulations for interns
6. Regulations for Mini-Jobber
7. Regulations for Christmas and holiday pay, benefits in kind
and surcharges
8. Penalties for not complying with the minimum wage
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1. Who receives the minimum wage?
In principle, every employee is entitled to the minimum wage. This also
includes interns, limited term employment relationships, probation periods in
permanent employment contracts and trial work situations.
The minimum wage does not apply to:
■ Certain internships (see point 5 „Regulations for Interns“)
■ Participants in an entry-level qualification activities or preparation for
vocational training
■ Trainees / apprentices
■ Long-term unemployed (the minimum wage may be undercut during
the first six months after unemployment)
■ Young people under the age of 18 without a completed vocational
training
■ Volunteers
Special rules apply to newspaper delivery persons. The minimum wage will
be introduced gradually for these persons.
2. New record keeping requirements for business owners
New record keeping requirements exists with respect to workers who are
employed in the commercial sectors listed in § 2a of the Clandestine Employment Prevention Act. These record-keeping requirements also apply to
all marginal part-time employees, i.e. low-paid and short-term employment.
Industries described in § 2a of the Clandestine Employment Prevention Act are:
■ Construction industry
■ Catering and accommodation industry
■ Passenger transportation industry
■ Freight forwarding, transportation and related logistics industry
■ Fairground amusements
■ Forestry companies
■ Building cleaning services
■ Companies that are engaged in the assembly and dismantling of fairs
and exhibitions
■ Meat processing industry
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Methods of record keeping:
■ Flextime scores (with „Arrival“, „Departure“ and „Total“)
■ Shift and duty rosters stating the date, employee name and actual hours
of work, where said rosters are then confirmed by the employer within
one week after the work is performed
■ Excel tables providing the start, end and duration of working hours
The record keeping requirement applies to monthly salaries under
EUR 2,958.00 gross per month for these commercial sectors. There is no
risk that the minimum wage will be violated with respect to employees who
earn more than EUR 2.958,00 per month gross.
The threshold for compensation shall be calculated as follows:
■ Max. 29 days per month x 12 hour = 348 hours per month
■ 348 hours x EUR 8,50 gross per hour = EUR 2.958,00 gross per month
A party that violates the record-keeping obligations must pay a fine of up to
30,000 €. The corresponding records should be held for at least two years.
3. The working time account
Employees may have problems accumulating and dispensing of overtime
hours which first become payable at a later date or upon release from
employment. Such cases may mean that the employers ultimately fall short
of the minimum wage.
A working time account enables the employer to easily follow the general
rule that overtime should be paid by month. The employee must agree in
writing that such an account may be kept.
The following requirements must be fulfilled:
■ The working time account must be in writing.
■ No more than 50% of the contracted hours may be credited in the
account monthly.
■ The hours recorded on the working time account must be settled
within twelve months, either by time-off or compensation.
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4. Payment date of the minimum wage
The employer must pay the employee the minimum wage
■ on the agreed date,
■ at latest however on the last banking day of the month following the
month in which the work is performed.
5. Regulations for interns
The minimum wage does not apply to:
■ Internships of up to three months that are necessary for vocational
training or for acceptance into a field of study.
■ Max. three month internships that accompany a professional and
academic training, if such an internship relationship has not existed
previously with the same intern.
■ Internships which are compulsory under school, vocational or study
regulations (up to the maximum length specified therein).
Interns that make a voluntary internship after completing their studies or a
vocational training must be paid the minimum wage.
Obligatory internship
Voluntary internship
Internships before
completed university
education or vocational
education
(pre-course internships)
no minimum wage
(§ 22, Para. 1, No. 1 MiLoG)
Minimum wage for
internships of more than 3
months, no minimum wage
for internships up to three
months
(§ 22, Para. 1, No. 2 MiLoG)
Internship during university
education or vocational
education
(mid-course internships)
no minimum wage
(§ 22, Para. 1, No. 1 MiLoG)
Minimum wage for
internships of more than 3
months, no minimum wage
for internships up to three
months
(§ 22, Para. 1, No. 3 MiLoG)
Internships after completed
university education or
vocational education
(post-course internships)
no minimum wage
(§ 22, Para. 1, No. 1 MiLoG)
minimum wage
The Work Relationship Disclosure Act (NachwG) has been extended to
internship. The employer is now obliged to prepare an internship contract
and present a signed copy to the trainee/intern.
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The contract must include the following:
■ Name and address of the contracting parties
■ Educational and training objectives of the internship
■ Start and duration of the internship
■ Duration of the regular internship period
■ Payment and amount of compensation
■ Period of vacation leave
■ General reference to the collective wage agreements or works
agreements that apply to the internship relationship.
6. Regulations for Mini-Jobber
Mini-Jobbers must be paid the minimum wage of EUR 8,50 gross per hour
as well. Special record keeping requirements apply to them (see item 3
above).
The employee must be paid for its wages or salary during the time he/she is
on vacation or on sick leave, as the so-called lost wages principle applies.
7. Regulations for Christmas and holiday pay, benefits in kind
and surcharges
If Christmas or holiday pay is ensured as a voluntary one-time payment, this
shall not be treated as pay for work rendered by the employee. Therefore,
no credit/addition to the minimum wage may be made.
Moreover, bonuses and allowances whose payment is subject to certain
conditions are also not included in the statutory minimum wage, such as
production incentives, quality bonuses, increased pay for overtime, Sunday
and holiday work and severity allowances or hazard pay.
Benefits in kind are not included in the calculation of the minimum wage.
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8. Penalties for not complying with the minimum wage
Failure to comply with the minimum wage shall be punished by a fine. An
employer who fails to comply or does not pay the minimum wage in a timely
manner may expect a fine of up to EUR 500.000,00.
The employee has a claim under labor law to a pay raise to the minimum
wage level, if their current pay is below that level.
If an audit occurs by the German Pension Insurance Scheme, the social
security contributions will be calculated according to wages accumulated
at the place where the work is rendered (principle of origin). Social security
contributions are calculated retroactively based on the minimum wage and
the difference with respect to the previous contributions will then be
collected.
You have questions on this article?
Do not hesitate to contact Barig e.V.!
Via phone: +49 69 23 72 88
Via e-mail: barig@barig.aero
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