Minimum wage to rise to 12 euros per hour from October

In addition to an increase in the minimum wage to 12 euros, the mini-job limit is also to rise on October 1, 2022.

The statutory minimum wage is to be raised to 12 euros on October 1. The coalition government had already agreed on the increase in the coalition agreement, but had not yet named a specific date for it. The date of October 1, 2022 means that the minimum wage will be raised a total of three times this year in addition to the two regular increases on January 1 and July 1. Thereafter, the minimum wage is to be adjusted again on the basis of decisions by the Minimum Wage Commission, for the first time with effect from January 1, 2024.

The draft of the "Act to Increase the Protection Provided by the Statutory Minimum Wage," which has now been passed by the German government, also raises the pay limit for mini-jobs to 520 euros per month and makes it dynamic, so that in the future a weekly working time of 10 hours at the minimum wage will be possible. Further changes to mini-jobs and midi-jobs are intended to encourage people to take up employment under social security law.

To this end, the maximum limit for employment in the transitional sector (midijob) will be raised from 1,300 euros per month to 1,600 euros. In addition, the burden on employees within the transitional area will be reduced even further and the jump in the burden when moving from marginal employment to employment subject to social insurance contributions will be smoothed out. Above the marginal earnings threshold, the employer's contribution will initially be adjusted to the flat-rate contributions of 28 % to be paid for a mini-job and then gradually reduced to the regular social security contribution.

Finally, the requirements for an "occasional unforeseen exceeding" of the marginal earnings threshold are also regulated by law. Accordingly, an unforeseeable exceeding of the marginal earnings threshold shall not change the mini-job status if the marginal earnings threshold is exceeded by an amount up to the amount of the marginal earnings threshold in each case in no more than two months within the time year to be formed for the respective payroll accounting period. The regulation allows for limited overtime for unforeseeable reasons as well as one-time payments, the reason and amount of which depend on the business result or an individual work performance of the previous year.

Along with the law, the German government has also decided that the Federal Ministry of Labor and the Federal Ministry of Finance should jointly examine how electronic and tamper-proof working time records can further improve enforcement of the minimum wage. In particular, small and medium-sized enterprises should not be unduly burdened by the acquisition of time recording systems. To this end, the development of an app for time recording is to be examined, which can be made available to employers free of charge.