National Minimum Wage to Increase

The situation

The Minimum Wage Commission has, based on the Minimum Wage Act, announced that the national statutory minimum wage paid to local and foreign workers in Germany will increase from EUR 8.84 per hour to EUR 9.19 per hour (approximately EUR 1,470.00 per month based on a 40-hour week) on January 1, 2019, and to EUR 9.35 per hour (approximately EUR 1,496.99 per month based on a 40-hour week) on January 1, 2020.

A closer look

• Existing employees. Employers of foreign nationals under any work permit in Germany will need to  increase their foreign nationals’ minimum salary to comply with the new amounts as of the above dates. Extension applications that do not meet the minimum wage may be rejected.
• Initial and renewal applications. Employers of foreign nationals seeking to obtain or renew any work permit in Germany on or after the above dates must increase the foreign national’s minimum salary to comply with the new respective amounts. Immigration applications that do not meet the minimum salary may be rejected.
• Pending applications. Employers of foreign nationals with pending work permit applications as of the above dates must ensure the foreign national’s minimum salary complies with the new rule. Immigration applications that do not meet the minimum wage may be rejected.

Reminders on other requirements

• Benefits and allowances. Under certain circumstances, employers can use benefits and allowances to meet minimum wage/minimum salary level requirements.
• Market salary rate. Other work permit-specific minimum salary rules, such as that the salary has to be comparable to the salary of a German national working in the same position with the same qualifications and experience, will still apply.
• Currency. As before, employers are required to guarantee the salary in EUR regardless of payroll location and/or exchange rate fluctuations.

Background

The last time Germany increased its statutory minimum wage was in 2016. The minimum wage does not usually impact foreign workers in Germany, who are typically highly-skilled and earn more than the minimum wage amount.

Minimum salary requirements may also apply to foreign workers aside from the minimum wage amount. Minimum salary requirements for foreign workers in Germany depend on the job title, branch, region and work experience and are not made public.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].