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German Cabinet adopts 12 euro minimum wage from October 2022

From 1 October 2022, the statutory minimum wage will increase to twelve euro per hour, and the mini-job threshold will increase to EUR 520. The German Cabinet adopted the bill presented by Federal Labour Minister Heil. Generally, under the Minimum Wage Act, the Minimum Wage Commission, in which unions and employers are represented, will propose a wage adjustment, which then becomes binding by statutory decree. In this case, the Federal Government has deviated from the agreed procedure. Any future adjustments should again be made in response to a proposal of the Minimum Wage Commission.

The increase in the minimum wage also affects low-paid employment, so-called mini-jobs or 450-euro jobs. To ensure low-paid employees can still work ten hours per week under the new minimum wage, the bill increases the mini-job threshold to EUR 520. The Federal Government also adopted measures aimed at promoting employment subject to social security contributions and preventing the misuse of mini-jobs as a replacement for regular employment. To make the mini-job worth it, the maximum income limit for a mini-job has been increased from EUR 1,300 per month to EUR 1,600. This provides greater relief for low-wage employees who are subject to social security contributions.

Germany has had a statutory minimum wage since 2015. It sets the minimum wage level for nearly all employees. Exceptions apply to only a few groups of persons, such as trainees, long-term unemployed or some interns. Since January 2022, the minimum wage has been set at EUR 9.83 gross per hour. The minimum wage will increase to EUR 10.45 on 1 July, and to EUR 12 from 1 October.

(Source: Press release of the German Federal Government of 23 February 2022)