On 28 June 2016, the Minimum Wage Commission, composed of employer and employee representatives, unanimously decided that the statutory minimum wage will be raised from the current €8.50 to €8.84 at the beginning of 2017.
Increase to €8.84
After two years of the statutory minimum wage, it will now be raised to €8.84. The Minimum Wage Commission, which consists of a chairperson, three representatives each from the trade unions and the employers, and two advisory academic members, now determines the level every two years. According to the chairperson of the commission, Mr Jan Zilius, the level of adjustment is based on collective bargaining developments, that is, on the increase in the average collectively agreed hourly wage. The commission naturally also has its own discretionary scope.
It can therefore be noted that, from 2017, every employee in Germany must receive a statutory minimum wage of €8.84.
Adjustment of Employment Contracts Required
For many employers, the increase in the statutory minimum wage entails considerable administrative effort. Particularly in the case of marginally employed staff, contract adjustments are essential to ensure that the marginal employment thresholds are not exceeded.
We are, of course, available at any time to assist you with implementing the increase in the statutory minimum wage and with all other questions relating to employment law.
Frequently asked questions
Frequently asked questions
What is the statutory minimum wage as of 01/01/2017?
As of 01/01/2017, the statutory minimum wage in Germany rises from EUR 8.50 to EUR 8.84 gross per hour. This increase applies in principle to all employees in Germany.
Who sets the level of the statutory minimum wage?
The minimum wage is set by the Mindestlohnkommission (Minimum Wage Commission), which consists of a chairperson, three representatives each from trade unions and employers, and two advisory academic experts. Adjustments are made every two years and are guided by collective bargaining trends, while the commission retains its own scope for discretion.
Why must employment contracts be adjusted when the minimum wage is increased?
Raising the hourly wage to EUR 8.84 may cause existing employment contracts to exceed statutory pay thresholds. This is particularly relevant for marginally employed staff (Minijobs), where contract adjustments — such as reducing working hours — are essential to ensure the EUR 450 monthly threshold for marginal employment is not exceeded.
How often is the statutory minimum wage adjusted?
The statutory minimum wage is reviewed and reset every two years by the Minimum Wage Commission (Mindestlohnkommission). The first adjustment after its introduction in 2015 took effect on 01.01.2017.