Statutory minimum wage to rise
The Cabinet’s decision was based on the recommendations of the Minimum Wage Commission. It unanimously proposed the adjustment to the minimum wage on 30 June 2020.
The gross minimum hourly wage, which is currently 9.35 euros, is to be increased in four stages:
- As of 1 January 2021 to 9.50 euros
- As of 1 July 2021 to 9,60 euros
- As of 1 January 2022 to 9.82 euros
- As of 1 July 2022 to 10.45 euros
Minimum protection for employees and fair competition
The Minimum Wage Commission came to its decision after carefully weighing up all factors involved. It was required to ascertain what level of minimum wage would best help provide an appropriate minimum protection for employees, while facilitating fair and operational terms of competition and not jeopardising jobs. In this, the Minimum Wage Commission took its lead from trends in collective bargaining agreements, while also factoring in the economic uncertainties arising from the COVID-19 pandemic.
Income situation improved in the low-wage sector
The gradual increase in the statutory minimum wage will improve the income of employees in the low-wage sector. Women will benefit disproportionately, as will employees in the east of Germany. Increasing the minimum wage will improve the economic and social situation of workers.
Find out more here about the minimum wage.