News on the minimum wage law

As reported on our website (17.11.2014 and 02.01.2015 only available in English), the freight and logistics sector must also comply with the Minimum Wage Act. However, even six months after the introduction of the law, there are still numerous uncertainties regarding its application. Moreover, many aspects of the scope of application have not yet been clarified. For this reason, a legal paper (published in “Neue Juristische Wochenschrift” 26/2015, S, 1844-1849) once again pointed out the following problem points:

Wages and working hours, employers’ obligations to keep records: In the above-mentioned sectors, the recording obligations apply to all employees, i.e. in principle also to employees with a much higher salary than EUR 8.50 gross/hour.  An exception to this basic rule has now been created by a new regulation, which stipulates that employees who earn at least or more than EUR 2,958 gross per month may be exempted from the obligation to keep records.
Client liability: Client liability applies not only to clients within the transport and logistics sector, but also to clients who commission companies from these (or other) sectors to provide a service. In view of this aspect, it cannot be pointed out clearly enough that every time a company is commissioned, it must be ensured that the minimum wage law is complied with in order to avoid liability for recourse.

In the transport sector, it was not yet clear at the start of the Minimum Wages Act in January 2015 whether the principal’s liability could also apply to a shipper or consignor. The Federal Ministry of Labour and Social Affairs has now provided some clarification. According to the ministry, the principal’s liability only applies to a shipper/consignor if he has undertaken to his own customer to transport an item or goods and passes this obligation on to a transport subcontractor. Whether this means that only carriers and forwarders can come under the scope of principal liability for the transport of goods will have to be established by case law. Similarly, the question of principal liability also arises in the case of freight exchanges. Here there is the danger that in the fast business of freight exchanges the contract will be awarded to a provider unknown to the client, who may not comply with the minimum wage law. The law does not provide for a relaxation of the client’s liability in such cases. Therefore, it only remains for the client to point out already in the preparation of the offer that interested transport companies must insure that they will pay the statutory minimum wage, otherwise they will be excluded from the award.

As a result of the minimum wage law, the costs for transport companies in local and long-distance transport increased by around 17 percent. However, it is not only the higher personnel costs, but also the associated liability, including client liability, which means that companies need to take action. The management of freight processes and the representation of subcontractor chains will therefore become even more important.
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