Statement of the German MoLSA for the ZCH

02. February 2015

On 1 January 2015, the Act providing for the introduction of a minimum wage – Gesetz zur Regelung eines allgemeinen Mindestlohns (Mindestlohngesetz – MiLoG) has come into effect in the Federal Republic of Germany. According to the Act, all employees who perform work for their employers within the territory of the Federal Republic of Germany must receive wage in the minimum gross amount of EUR 8.50 for each hour of work. Nevertheless, the Act does not distinguish whether the employer is a German or a foreign entity, i.e. whether the employer’s seat is in Germany or abroad. In addition to a substantial financial impact upon all Czech employers whose employees perform at least part of their working hours in Germany (be it shippers, construction workers, travel agents or dealers), the Act also brings along a great load of administrative work. Needless to say, a failure to comply with the Act is subject to a financial penalty (the Act provides for penalties up to EUR 500,000).

Since the interpretation and the extent of operation of the Act is very much disputed (not only in the Czech Republic), the law firm ZILVAROVÁ CTIBOR HLADKÝ requested a written statement regarding the interpretation and application of the Act directly from the German Ministry of Labor and Social Affairs. The law firm ZILVAROVÁ CTIBOR HLADKÝ is actually the first one to receive the official statement provided by the German Ministry of Labor and Social Affairs. It is a clear and apt view of the scope of application of the Act made by German authorities. In addition, the statement also deals with the confluence of German minimum wage and foreign meal allowance provided by an employer or an ordering party’s guarantee, and with the option to rule out the guarantee by contract.

The German Act providing for the introduction of a blanket minimum wage is currently subject to legal analysis and protests on the part of state authorities and employers‘ associations across Europe. The confluence of the German Act with EU regulations will be also discussed by the European Commission (and later on maybe also by the Court of Justice of the European Union).