Increases in minimum wage and marginal earnings threshold – well-intentioned gesture or risk for the economy?
At the start of its legislative period, the new federal
government set itself ambitious goals of reforming the labor market
and the social system. One of the key points of the election
campaign was that more justice and respect should be shown to
working people, especially those with lower incomes.
On 23 February 2022, the draft legislation to increase the minimum wage and the maximum monthly amount for marginally employed individuals proposed by the old and new Federal Minister of Labor, Hubertus Heil, passed the federal cabinet. Once executed and published, it will enter into force on 1 October 2022.
In the following, we will show what consequences will arise for both employees and employers.
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