With the beginning of 2015 Germany introduces for the first time in its history a general minimum salary. Until now Germany was one of the few European countries without such a standard. Employers are obliged to pay their employees an hourly gross salary of not less than 8,50 Euro beginning in January. According to calculations of the German government about 3,7 Million people are currently earning less than that and will benefit from the new legislation.

The minimum wage will be attuned to the salary level development on the German market on a regular basis by an independent commission with members from both labour unions and employer organization.

Minimum salary valid for Bulgarians

The new minimum wage will cover all employees that work in Germany, no matter what nationality. Furthermore, also foreign companies have to comply with the requirements of the minimum salary law (with the official, not very reader-friendly name “Tarifautonomiestärkungsgesetz”) and pay their delegated staff at least the defined hourly salary of 8,50 Euro. This can be the case e.g. for Bulgarians that are send to Germany to do services – but working on a Bulgarian labour contract.

Correlation with Arbeitnehmerentsendegesetz

For several business branches a minimum salary is no news at all: The Arbeitnehmerentsendegesetz-law which was introduced in 1996 and fundamentally revised in 2009 defined minimum wages for several industrial sectors such as construction, cleaning, and health care.

The Arbeitnehmerentsendegesetz is binding for foreign companies once they are active on the German market. As the name indicates the intention of it was to avoid dumping competition of foreign companies that pay wages below German standards to their employees. The minimum wages vary depending on the particular industry but are in general higher than the newly introduced general minimum salary. In case that one of the defined rates is higher than the 8,50 Euro, employers will have to continue to comply with the well-known Arbeitnehmerentsendegesetz and transfer remunerations above the 8,50-threshold.

Accountability of companies under new minimum wage law

The new Tarifautonomiestärkungsgesetz which regulates the minimum wage points in its §14 “Accountability of purchaser” to the respective norm of the Arbneitnehmerentsendegesetz which is to be used here as well. Accordingly companies bear responsibility if other companies that fulfil service contracts for them violate the minimum wage norm. They may be charged for malpractice of sub-contractors with administrative offence of up to 500.000 Euros per case. It will be highly advisable that companies avoid this risk by including rights of exemption in their contracts with sub-contractors.