Minimum Wage in Germany Set to Increase to €12.41

The general statutory minimum wage in Germany is set to increase from €12.00 to €12.41 as of January 1, 2024, and to €12.82 as of January 1, 2025. This proposal was presented by the responsible Minimum Wage Commission in Berlin on Monday.

Minimum Wage Increase Recommended in Germany Despite Dissent

The Minimum Wage Commission has announced its recommendation to raise the minimum wage in Germany. It is proposed that the minimum wage increase to €12.41 on January 1, 2024, and to €12.82 on January 1, 2025. However, the decision was not unanimous, as the worker representatives in the commission opposed this perceived insufficient raise and claimed to have been outvoted.

How Was the Amount Decided?

Last autumn, the minimum wage was temporarily increased from €10.45 to €12.00 by legislation due to the efforts of the Social Democratic Party (SPD) during the previous federal election campaign. Otherwise, the Minimum Wage Commission is responsible for setting the minimum wage. It consists of three high-ranking employer and trade union representatives, two scholars, and one chairperson who meet every two years to discuss a wage floor increase, taking into account the country’s collective bargaining developments. The commission then presents a proposal that the government typically enforces through a regulation.

Criticism Arises Over Minimum Wage Increase

Trade unions criticize the fact that minimum wage workers have to accept a real wage loss due to rising prices. The German Trade Union Confederation (DGB) stated that the Minimum Wage Commission had made an absolutely unsatisfactory decision against the votes of the unions.

Stefan Körzell, a member of the Minimum Wage Commission and a board member of the DGB, said in Berlin on Monday, “We could not possibly support a mere cent-range adjustment.” With this decision, nearly six million minimum wage workers experienced a significant real wage loss. “To ensure minimum protection and compensation for inflation, the minimum wage should have been raised to at least €13.50. The employers and the commission’s chairperson refused to do so.”

How Many People Work for €12 Minimum Wage?

It is difficult to determine the exact number. According to the latest data from the Federal Statistical Office, approximately six million dependent employees (15 percent) were employed in the low-wage sector in October. The low-wage sector includes jobs where workers are paid less than €12.76 per hour. The increase of the minimum wage to €12 in October reportedly benefited around 5.8 million people who were previously earning less than €12 per hour.

Is the Minimum Wage Gross or Net?

It is gross. According to the Federal Ministry of Labor and Social Affairs, employees working a 40-hour week at the minimum wage currently earn approximately €2,080 gross per month. With the increase to €12.41, employees would earn around €2,150 gross.

The net amount, after deductions for taxes, pension contributions, health insurance, nursing care insurance, and unemployment insurance, depends on various factors such as tax class, marital status, and the number of children.

Consequences for Employers Paying Less

This can be costly. Penalties of up to €500,000 can be imposed. Additionally, the company may be excluded from receiving public contracts. The Federal Ministry of Labor and Social Affairs website provides a “Minimum Wage Calculator” where individuals can enter their gross salary and weekly working hours to check if their salary falls below the minimum wage. In case of violations, the responsible customs