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Outcome of minimum wage introduction in Germany

Staff writer |
The German companies that will be affected by the introduction of the minimum wage on January 1 plan to raise their prices (26%), decrease their special payments (23%), downsize workforce (22%), shorten working hours (18%) and invest less (16%).

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The is the outcome of a current questionnaire by the IFO institute, reports the German website

In most cases people opt for a combination of the above plans, as only 43% of the companies don't plan on responding to the introduction of the minimum wage.

With the new Minimum Wage Act (Mindestlohngesetz, MiLoG) a statutory national minimum wage will be introduced in Germany for the first time. The Minimum Wage Act obliges every employer to pay at least the minimum statutory wage from 1 January 2015. Compliance with this obligation will be monitored by the Customs authorities in Germany.

All employees in Germany are entitled to the statutory minimum wage. This particularly applies for employees during any probationary period as well as part-timers or marginal employment (i.e. employees with a monthly salary of up to € 450. Interns are also entitled to the minimum wage.

The minimum wage does not have to be paid in a few exceptional cases, for example, in the case of internships required by training or university courses.

Apprentices, volunteers and employees under the age of 18 without a vocational degree are not covered. Long-term unemployed individuals are excluded from the minimum wage for a period of six months so as to help them get back into employment.

The minimum wage will initially be € 8.50 gross per hour. As of 1 January 2017, increases will be possible for the first time upon the recommendation of a Minimum Wage Commission which will be established for this purpose.

The minimum wage is to be paid to the employee on the agreed date of payment, but on the last working day of the following month at the latest.

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