• Professional News
  • 19 December 2014

Germany to introduce minimum wage on 1 January 2015

A minimum hourly wage of EUR 8.50. This is the result of a new Act passed by the German Bundestag. The Act comes into force on 1 January 2015.

When the new German Act on minimum wage (Gesetz zur Regelung eines allgemeinen Mindestlohns) comes into force at the turn of the year, all undertakings with employees in Germany will have to take note of the new rules – even if they pay their employees considerably more. This is because the statutory minimum wage of EUR 8.50 per hour is included in all wage payments in principle.

 Late payment of wages may trigger substantial penalties
The minimum wage requirement of EUR 8.50 must be observed for all wage payments. This means that if an undertaking fails to pay at least EUR 8.50 per hour of an employee’s wage in time, the overdue wage payment will be considered an administrative violation (Ordnungswidrigkeit). Administrative violations are punishable with a penalty of up to EUR 500,000.

Non-payment of social security contributions a punishable offence
Where an undertaking fails to pay the mandatory social security contributions of its employees wages or withholds wages, such non-payment constitutes a punishable offence under the German criminal code.

Failure to comply with the new Act in other areas will also count as an administrative violation and may result in a fine being imposed on the undertaking. 

Accordingly, all undertakings with employees in Germany should make sure that they are acquainted with and comply with the provisions in the new minimum wage act.

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