German minimum wage gets go-ahead

A minimum wage of €8.50 (£7.05) an hour, the figure called for by German unions, has been included in the coalition agreement — the document which sets out the detailed programme of the German government over the next four years.

It means that for the first time, Germany will have a statutory minimum wage and it will apply at the same level across the country — a key trade union demand. However, there will be a staged introduction. The minimum wage of €8.50 will apply in most cases from 1 January 2015.

But for two years, existing agreements paying less than €8.50 will continue to be in force, provided they have been signed by representative unions and employers at industry level. Only from 1 January 2017 will the €8.50 minimum wage become universal.

The rate will be reviewed regularly through a joint commission of representatives of the unions and the employers, with academics being brought in as advisers (without a vote). The commission’s decisions on uprating — the first will be from January 2018 — will be implemented through statutory regulation.

The DGB, which brings together all Germany’s major unions, has generally welcomed the plans which it believes will “improve the lives of many people as well as the competiveness of companies that treat their employees fairly”.

However, it is concerned that the figure will be frozen until 2018 and will press for an earlier increase.