Minimum Wage Law
For many years, Germany was one of only a few European countries that did not have a minimum wage or comparable regulation. Since January 1, 2015, the country has had comprehensive minimum wage legislation in force. The law defining minimum wage and its requirements is called the Minimum Wage Act or MiLoG (Mindestlohngesetz).
What is the minimum wage under MiLoG?
The MiLoG obliges employers to pay a minimum statutory wage to every employee working in Germany. When the MiLoG was introduced in 2015, the government set the amount at € 8.50/ hour. In 2017, it increased to € 8.84/hour.
For a full-time job (40-hour/week), the monthly gross salary is € 1,538.16.
- 4.35 weeks/month x 40 hours/week x € 8.84 = € 1,538.16
Which allowances or supplements are considered part of the salary under MiLoG?
As a general rule, the minimum wage must consist of monetary payments. Compensation or benefits provided by the employer for the performance of work in a form other than money are not taken into account.
However, not all payouts to the employee are accepted as wage components from a MiLoG perspective. The more components the salary consists of, the more important it is to ensure the minimum wage is reached.
The deputation (or secondment) of a foreign employee to Germany often includes several allowances or supplements paid by the employer. The wage package often consists of the following:
- Base salary (home country)
- Additional salary to meet local standards (for the period of deputation)
- Daily living allowance
- Food allowance
- Accommodation allowance
- School tuition
- Relocation expenses
International engagement requires professional consultancy
Dwyer Legal law firm has several years experience in the field of labour and minimum wage law. Our team consults and supports our national and international company clients in all related aspects, including deputation and employment contracts.
Correspondence languages are English, German, and Italian.
Contact us if you need advice regarding the MiLoG or salary requirements for your employee working in Germany.