Increase in Minimum Wage Reaches EUR 12.82
Germany's Minimum Wage to Increase in Stages Starting 2024
Germany's minimum wage is set for an increase, with the first step taking effect on January 1, 2024. The federal government announced the decision, following the recommendation of the Minimum Wage Commission.
Currently, the minimum wage in Germany stands at 12 euros gross per hour. According to the commission's proposal, this will rise to 12.41 euros on the aforementioned date. Another increase is planned for the following year, bringing the minimum wage up to 12.82 euros gross per hour.
The Minimum Wage Commission bases its decisions on the development of collective bargaining wages in Germany. The commission examines the minimum wage level that provides adequate protection for employees, ensures fair competitive conditions, and does not endanger employment. However, the proposal does not indicate the effective date of any potential minimum wage increase.
The proposal is subject to approval by the federal government before it becomes binding. In a statement, Federal Minister of Labor Hubertus Heil acknowledged that employees and trade unions would have preferred a higher minimum wage, but the government will implement the current recommendation.
The commission's proposal was not passed unanimously for the first time since the introduction of the minimum wage in 2015. The lack of unanimity was due to the minimum wage proposal being a compromise below some demands, ongoing debates about exemptions in particular sectors, and the political sensitivities during coalition negotiations.
One contentious issue was the call to exempt seasonal agricultural workers from the minimum wage, which the Federal Ministry of Agriculture rejected. The government and the Federal Ministry of Labour opposed any exemptions, highlighting a focus on worker protection.
Once approved, the increase will mark the second time the minimum wage has been raised since 2019. The minimum wage will increase twice, with the first increase taking effect on January 1, 2024, and another increase scheduled for the following year.
The Minimum Wage Commission presents its proposal to the federal government, which usually makes it binding through a regulation. The commission's proposal is intended to balance the needs of employees, fair competition, and employment stability.
[1] Source for the contention around calls to exempt seasonal agricultural workers
[2] Source for the lack of unanimity
- The Federal Ministry of Agriculture rejected the call to exempt seasonal agricultural workers from the minimum wage, leading to a contentious issue during the Minimum Wage Commission's proposal.
- The lack of unanimity in the Minimum Wage Commission's proposal was due to ongoing debates about exemptions in particular sectors and the political sensitivities during coalition negotiations.
