Minimum wage

Minimum wage / Mindestlohn

April 03, 2025

Every employee in Germany is entitled to the minimum wage. From 1 January 2025, the statutory minimum wage will be 12.85 euros gross per hour. When the minimum wage was introduced in 2015, it was 8.50 euros per hour. Over the years, the minimum wage has been continuously adjusted. Since 1 October 2022, a minimum of 12 euros had to be paid. The minimum wage is set every two years by a minimum wage commission.

Entitlement to payment of the minimum wage

The Minimum Wage Act (MiLoG) is not a requirement for controlling contractual remuneration agreements, but rather grants a legal entitlement to payment of the difference, i.e. insofar as the wage paid falls short of the minimum wage requirements.

This claim, based on §§ 1 Sec. 2, 20 MiLoG, arises with and for each hour worked. For example, in the event of incapacity to work due to illness, the claim for continued remuneration follows from § 3 Sec. 1 S. 1 in conjunction with § 4 Sec. 1 of the Continued Remuneration Act (Entgeltfortzahlungsgesetz) and not from MiLoG. However, the employee must be treated as if they had worked, so that they receive the minimum wage as the lower limit of the continued remuneration.

Who is subject to the minimum wage?

The minimum wage applies to employees, but not to apprentices. Interns are generally considered employees. They only exceptionally do not have to be paid the minimum wage if

• it is a compulsory internship,
  
• the internship lasts no longer than three months and serves as orientation for a vocational training programme or a course of study,
• the internship lasts no longer than three months and is completed during a vocational training programme or a course of study, or
• the interns are participating in an entry-level qualification or vocational training preparation programme funded by the Federal Employment Agency.

Further exceptions apply to:

• young people under 18 years of age who have not completed vocational training: these are excluded from the minimum wage in order to increase the incentive for employers to take on young people without qualifications.
• Trainees: As special training allowances apply to them, this group does not fall under the Minimum Wage Act.
  
• Volunteers: People who do voluntary work are not entitled to the statutory minimum wage, as their work is generally unpaid.
• Long-term unemployed people in the first six months of a new job: To make it easier to reintegrate them into the labour market, the minimum wage only applies to them after they have been in their new job for six months.
  

In principle, sector-specific or collectively agreed deviations are possible, but the statutory minimum wage of €12.82 gross per hour must not be undercut. In some sectors, such as nursing or construction, higher sector-specific minimum wages apply.

Minimum wage for freelancers?

The minimum wage does not apply to the self-employed. Tradespeople or freelancers do not have to be paid the minimum wage for their work because they are not employees. Some start-ups use a business model that is largely based on the services of ‘freelance employees’. If the fee for self-employed persons is calculated on an hourly basis and is below the minimum wage, it should be carefully checked whether these are not bogus self-employed persons.

Calculating the minimum wage – fixed monthly salary

If an hourly wage has been agreed, it can simply be multiplied by the number of hours worked per month. However, an employee usually earns a fixed sum x per month. In this case, it must be checked for each month whether the minimum wage has been observed, because each calendar month has a different number of working days. It is easier for the employer to pay a so-called fixed monthly salary. In this case, the hourly wage is multiplied by the weekly working hours and a factor of 4.33. The exact calculation can be made using a minimum wage calculator provided by the Federal Ministry of Labour and Social Affairs. This fixed monthly salary can then be paid out as a lump sum each month.

Due date of the minimum wage and working time account

It should be noted that the payment of a fixed monthly salary actually contradicts § 2 (1) of the Minimum Wage Act, according to which the salary (at the minimum wage) must be paid at the agreed time, but no later than the last banking day of the following month. However, since the months have different numbers of working days, the minimum wage threshold is not reached (just) in some months. However, according to the Federal Ministry of Labour and Social Affairs, this is not a problem as long as it evens out over the course of a year. Overtime must be transferred to a working time account that has been agreed in writing and must be compensated within twelve months by time off or payment of the minimum wage, provided that the minimum wage has not already been reached in total through the regular wage. Only up to 50% of the agreed working hours may be transferred to the working time account as additional hours.

Inclusion of special payments

The question arises as to what extent special payments can be included in the minimum wage. Benefits that are only paid once a year, such as Christmas or holiday bonuses, would in principle only be included in the month of payment or the following month, because the minimum wage must be paid by the end of the following month at the latest. However, the Federal Labour Court ruled differently in a case in which the employee and employer had agreed to divide the annual special payments among the individual months, as a result of which the minimum wage threshold was reached in the individual months. Insofar as the payments definitively remained with the employee and were not made without any connection to the actual work performed or due to special statutory purposes – such as a night work supplement – they could be taken into account for the minimum wage (BAG – judgment dated 25 May 2016 – 5 AZR 135/16). Insofar as special payments such as holiday pay, Christmas bonuses or loyalty bonuses are not paid under the contractual agreements as consideration for specific work performed, they are not to be taken into account. According to the legislator, capital-forming benefits and night work bonuses are also not to be taken into account. Tips and payments in kind are generally not deductible, although an exception is to be made for seasonal workers due to logistical and cost issues.

Documentation requirement

To ensure that the minimum wage is actually paid for each hour worked, there is a documentation requirement for marginally employed persons and for the economic sectors listed in Section 2a of the Act to Combat Clandestine Employment. These include the construction industry, restaurants and hostels, the freight, transport and logistics sector, forestry companies, industrial cleaning, exhibition stand construction, the meat industry and the prostitution industry. The daily working hours, excluding breaks, must be documented. This must be done within seven days of the work being performed. The corresponding list remains with the employer and must be presented in the event of a customs inspection. The Federal Ministry of Labour and Social Affairs provides a template. According to the Minimum Wage Documentation Requirements Ordinance (MiLoDokV), employers in certain sectors are obliged to document the start, end and duration of their employees' daily working hours. However, this obligation does not apply to employees with a regular monthly gross salary of more than 2,958 euros. In addition, the documentation requirement does not apply to employees with a regular monthly gross salary of more than €2,000, provided that this salary has been demonstrably paid over the last twelve months.