On 23 February 2022, the Federal Cabinet adopted a draft bill raising the minimum wage to EUR 12 per hour from 1 October 2022. The measure primarily supports workers in marginal employment and people working in low-wage occupations. The aim is to provide these workers with greater social and financial security by aligning their pay with current living costs.
Issues for Mini-Jobbers – Rising Minimum Wage
A large share of marginally employed workers in Germany is paid at the prevailing minimum wage (EUR 9.82 per hour from 1 January 2022). However, the threshold for marginal employment has remained at EUR 450 per month since 2013 and has not been adjusted since. The minimum wage, by contrast, is raised annually. As a result, marginally employed workers have had to reduce their working hours in recent years to avoid exceeding the marginal employment threshold and losing their tax benefits. For this reason, the new Federal Government intends, under its draft bill, to raise the marginal employment threshold to EUR 520 per month. However, the claim that this increase will fully relieve mini-jobbers is only partially correct. A comparison of how many hours a marginally employed worker could work per month in 2021 (minimum wage EUR 9.60) versus the expected minimum wage from 1 October 2022 reveals the following:
EUR 450.00 / EUR 9.60 = 46.875 hours per month
EUR 520.00 / EUR 12.00 = 43.33 hours per month
It becomes apparent that, despite the increase in the marginal employment threshold, marginally employed workers will be able to work approximately 3.5 fewer hours per month. A further increase in this threshold would be conceivable in order to provide additional relief to mini-jobbers.
Raising the Sliding Scale – Midi-Job
The upper limit of the transition range is also expected to be adjusted, from EUR 1,300 to EUR 1,600 per month. In addition, the transition range between marginal employment and employment subject to full social security contributions is to be aligned. On the one hand, this is intended to reduce the tax burden on the employer at the lower end of the sliding scale, and on the other hand, to encourage mini-jobbers to exceed the marginal employment threshold without losing their tax advantages.
Frequently asked questions
Frequently asked questions
When will the statutory minimum wage be raised to €12 per hour?
On 23 February 2022, the German Federal Cabinet adopted a draft law under which the minimum wage will rise to €12 per hour effective 1 October 2022. The increase is intended to benefit primarily employees in marginal employment (Minijobs) and in low-wage occupations.
What is the new mini-job threshold as of October 2022?
The marginal earnings threshold is being raised from the previous EUR 450 to EUR 520 per month. This is intended to prevent mini-job employees from having to permanently reduce their working hours due to rising minimum wages in order to stay below the threshold.
Can mini-jobbers work more hours under the new 520-euro threshold than before?
No, despite the increase the possible number of hours actually decreases slightly. At a minimum wage of 9.60 euros and a 450-euro threshold, around 46.9 hours per month were possible; at 12 euros and 520 euros, it is only about 43.3 hours. Mini-jobbers can therefore work roughly 3.5 hours less per month.
What changes are planned for midi-jobs and the transitional zone?
The upper limit of the transitional zone (sliding scale) is to be raised from €1,300 to €1,600 per month. In addition, the transitional zone between marginal and social-insurance-liable employment will be adjusted to reduce the employer's burden at the start of the sliding scale.
Why is the marginal earnings threshold being adjusted at all?
The threshold had remained unchanged at €450 since 2013, while the minimum wage rose every year. As a result, minijob employees had to regularly reduce their working hours in order not to lose tax advantages. The increase is intended to at least partially correct this imbalance and create incentives to move into the transition zone.