What should you expect to earn in Germany? Learn about German minimum wage regulation and average salaries.
While minimum wage regulations have been in other European countries for some time, the first federal minimum wage in Germany was only approved in 2014 under the new Minimum Wage Act (Mindestlohngesetz). Before this, the country primarily relied on trade unions and business groups to set German minimum wages.
In June 2016, the government announced the minimum wage in Germany would rise by 4% as of 1 January 2017. This increase was agreed after an independent commission proposed to raise salaries in Germany based on data from the Federal Statistics office. The increase was the first since the German minimum wage was introduced in January 2015, and it’s expected that the level of salary in Germany will be reviewed every two years.
Around four million people in Germany are paid the German minimum wage, and it’s applicable to almost all workers aged 18 or older, with the exception of self-employed people and some trainees and internships.
Minimum wage in Germany 2018
The minimum wage in Germany in 2018 is €8.84 per hour, or around €1,498 per month. This figure is the same as that in 2017, with the next wage review likely to be in January 2019.
The first German minimum wage in 2015 was set at €8.50 per hour. Based on a standard working week, employees earned a minimum salary in Germany of €1,473 before taxes per month.
The federal minimum wage applies to almost all employees, including foreign workers, part-time workers, interns (under certain conditions) and people working through a probationary period. Overtime must also be paid at the same level, unless it is instead used as time ‘in lieu’ that can be taken off at a later date.
Contract and temporary workers in Germany have different minimum wage levels. In April 2018, the wage increased to €9.47 an hour in western Germany, and €9.27 an hour in eastern Germany.
Exclusions from minimum wage in Germany
While the German minimum wage applies to the very majority of workers across the country, freelancers and self-employed people aren’t covered under the regulations.
Minimum wage in Germany also doesn’t apply to internships that last fewer than three months or are part of university courses, volunteer work or apprenticeships. Finally, people who are classified as long-term unemployed (Langzeitarbeitslose) can be paid below the German minimum wage for a six-month period when they first return to work. You can find more information about exclusions on the government website (in German).
What to do if you’re paid less than the German minimum wage
Employers face heavy penalties if they fail to pay the minimum wage in Germany to their staff. When the wage originally came in to law, the Tax Enforcement Unit for Undeclared Work (Finanzkontrolle Schwarzarbeit) expanded its staff considerably to deal with companies breaking the rules.
Works councils and employee unions also monitor underpayment at an industry level, and in theory companies can be fined as much as €500,000 if they fail to comply with the regulations.
Workers who believe they are being paid less than the German minimum wage should first speak to their employer to try and resolve the issue before escalating it to a third party.
Employees can approach their union (if applicable) and if the employer still fails to remedy the underpayment, legal action may be necessary. Employees have three years to make a claim for underpayment of less than the minimum wage in Germany.
Average salary in Germany
Working conditions and the average salary in Germany are better than in many other European countries. According to an OECD survey in 2016, three quarters of people aged 15 to 64 in Germany had a paid job, well above the OECD employment average, and only 5% of employees worked what are classified as ‘very long hours’.
According to research by De Statis (The Federal Statistical Office of Germany), workers in 2017 had average monthly earnings of €3,771 – with a significant pay gap between men (€3,964) and women (€3,330).
Rises in salary in Germany
According to the De Statis data, the index of real earnings in Germany increased by 0.8% in 2017, with nominal earnings up by 2.5% year-on-year. By comparison, inflation averaged 1.8% across the year.
Effect of the minimum wage in Germany
Data from the Institute of Social and Economic Research showed that in the first year the German minimum wage was applied, unskilled and low-skilled workers in particular enjoyed above-average increases in their German salary, as did employees in part-time employment (or mini-jobs, as these positions are sometimes known).
The biggest increases in salary in Germany were seen in the meat, security, gardening and landscaping, construction and catering industries. The fears that Germany’s minimum wage would affect unemployment levels were also unfounded, with unemployment levels actually dropping.
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