On July 11, 2014, the Bundesrat approved the latest draft of the
Minimum Wage Act (Mindestlohngesetz - MiLoG), a law proposed by the
federal government. The law will come into effect on January 1,
The new Minimum Wage Law imposes far-reaching regulations upon
employers. We have outlined the most important ones in the
1. Payment of minimum wages
Starting on January 1, 2015, every employer must pay to his
employees, who regularly work in Germany, a minimum wage of
EUR 8.50 (gross) per working hour. For the purpose
of the law, interns are also regarded as employees.
A few exceptions apply, in particular temporary exceptions where
branch-specific generally binding collective bargaining agreements
provide for different wages. However, as of January 1, 2017, the
amount of EUR 8.50 gross shall be the general minimum for all
industries and branches.
The exact amount of the hourly minimum wage shall be
re-determined on a biennial basis by the federal "Minimum Wage
Commission". Hence, future increases of the minimum wage are
2. Impact on part-time employees
The new statutory minimum wage has a particular impact on
part-time employees if they are employed on a marginal basis of
max. EUR 450.00 (gross) per month ("geringfügig
Beschäftigte/Mini-Jobbers") and if they currently receive
a wage below EUR 8.50 per hour. Though not explicitly stated in the
Minimum Wage Act, the actual working hours of these Mini-Jobbers
must be capped at 52 hours per month in order to
comply with the new law.
3. Special rules for foreign employers
The MiLoG also contains obligations for employers who have their
registered office outside of Germany and who are involved in
certain industries (e.g. the building industry, transportation
industry, or industrial cleaning). Before engaging employees or
independent contractors in Germany, the foreign employer has to
provide defined information to the German customs
authorities to allow them to screen and verify the compliance with
4. Liability for contractors
If a company assigns services to an agent it has to ensure that
such agent complies with the laws on minimum wages. Consequently, a
company must refrain from contracting with agents who do not comply
with the new law. If a company has knowledge of the agent
undercutting minimum wages or lacks such knowledge due to gross
negligence, it will be held liable for payment of the minimum wages
to the agent's employees.
We strongly recommend asking your contractors to confirm
that they comply with the MiLoG and to arrange for proper
5. Consequences of non-compliance
If employers do not comply with their duties under the new
Minimum Wage Law, a fine of up to EUR 500,000.00 may be
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
April 2015 saw the reshaping of family-friendly leave with the birth of Shared Parental Leave (SPL). Can employers offer enhanced contractual pay to mothers/primary adopters but not to fathers/partners?
In an eagerly awaited decision, the Court of Appeal ruled earlier today that creditors cannot access a bankrupt's pension benefits which have not come in payment.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).