Germany set for minimum wage

Germany will have a national minimum wage from the start of next year.

Legislation introducing a new hourly minimum rate of €8.50 (£6.72) an hour from 1 January 2015, passed both houses of the German parliament last month.

It is estimated that the minimum wage will benefit between 3.7 million and 4.5 million of Germany’s 35.5 million employees.

The new minimum wage applies to all workers in Germany, aged 18 or over, with a few exceptions. The most important is that the long-term unemployed (those out of work for a year or more) only have a right to the minimum wage after six months in a new job.

Those on work experience placements are also not covered, but only while they are studying or in training, and only for up to three months. In addition, there are some transitional arrangements. Paper delivery workers must be paid 75% of the minimum wage in 2015 and 85% in 2016 before going on to the full rate from 1 January 2017.

Industry-level collective agreements paying less than the minimum wage also continue to be valid until 1 January 2017, at which point the minimum wage, or a higher rate agreed by the parties will apply.

A minimum wage commission, made up of representatives of the unions and employers, with external experts in an advisory capacity, will decide on future increases in the rate.