The new minimum wage law in Germany

From January 1st 2015 on a new law will apply in Germany: The law of minimum wages “Mindestlohngesetz – MiLoG”. While before and with few exceptions, trade unions and employers’ associations controlled wages in Germany, this law allows the federal government to control basic salary rights for workers and employees of all industry branches.

From next year on, all employees will have the right to receive a minimum gross wage of EUR 8,5 per each working hour performed in Germany – no matter whether the employer is located in Germany or abroad, whether the employee is living in Germany or abroad, and whether the employer is fulfilling a contractual obligation for a German or a foreign company.

The law also obliges employers within the logistics and transport industry to keep a permanent record of their salary-payments, and to allow inspection of these payments by German authorities. In addition, employers that are located outside Germany have to register with the German Ministry of Finances for all work in Germany and for all employees that perform work for them in Germany. Within the transport chain, any German company hiring a (German or foreign) subcontractor for their shipments or their logistic tasks will be liable for the subcontractor’s obligation to pay minimum wages for the work performed in Germany.

Any failure to observe the law on minimum wages can be fined up to a maximum of EUR 500.000.

Concerning the transport industry, the new law might have the most impact on shipments by road. It will be interesting to see how German authorities will keep track of whether foreign truck drivers receive German minimum wages while driving on German roads. Besides, it is not yet published, how registration of work and foreign employees has to be effected.

One thing, however, is clear already: This law entails another set of obligations for the transport industry, which will demand precise organization and planning within a challenging and competitive market.