Subscribe
Categories
  • 409A
  • COBRA
  • Commentary/Opinions/Views
  • Deferred Compensation
  • Employment Agreements
  • Equity Compensation
  • ERISA Litigation
  • Executive Compensation
  • Family and Medical Leave Act (FMLA)
  • Fiduciary Issues
  • Fringe Benefits
  • General
  • Governmental Plans
  • Health Care Reform
  • Health Plans
  • International Issues
  • International Pension and Benefits
  • Legal Updates
  • Multi-employer Plans
  • Non-qualified Retirement Plans
  • On the Lighter Side
  • Plan Administration and Compliance
  • Qualified Plans
  • Securities Law Implications
  • Severance Agreements
  • Tax-qualified Retirement Plans
  • Uncategorized
  • Welfare Plans
  • Archives
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • BC Network
    Wednesday, January 4, 2017

    Rise of Minimum Wage as of January 1st 2017:

    As of January 1st 2017 the statutory Minimum Wage in Germany rises from € 8.50 to € 8.84 gross per hour. It is the first increase, since the Minimum Wage Act (Mindestlohngesetz – MiLoG) has put into effect a statutory minimum wage for Germany in 2015. This statutory minimum wage applies – with some exceptions – to all employees working on German territory. Most interim arrangements that allowed for lower wages for certain groups of workers expired on 31st of December 2016. As the Minimum Wage Act only states a base amount to be paid for any employee in Germany, binding collective bargaining agreements (Allgemeinverbindliche Tarifverträge) stipulate higher hourly wages in many work areas.

    Clients employing blue collar workers in Germany with low salaries as well as clients who have marginal employed employees (geringfügig Beschäftigte) are advised to check whether they comply with the new Minimum Wage.

    New contribution assessment ceilings for statutory Social Security as of January 1st 2017:

    In Germany, most social benefits such as health insurance, long-term care insurance, pension insurance as well as unemployment insurance are statutory and compulsory for the absolute majority of employees. These programs are generally financed by employers and employees jointly. The contributions employers and employees have to pay are determined by percentage rates applying to the gross salary of the employee. The contribution assessment ceilings (the maximum amount of monthly income to which the contribution rates apply) are subject to periodic changes. As of January 1st 2017, the monthly contribution assessment ceilings and percentage rates are as follows:

    Program Contribution Limit/Month Employer Portion Employee Portion
    Health insurance:
    14.6% shared equally + additional contribution by employee (1.1% in average depending on individual insurance company)
    € 4,350.00 (West & East) Up to € 317.55 Up to € 317.55 + additional contribution
    Long-term care insurance:
    2.55% shared equally (except Saxony, where employees cover 1.775% and employers cover 0.775%)
    € 4,350.00 (West & East) Up to € 55.46 Up to € 55.46 + 0.25% if employee is older than 23 and has no children
    Pension insurance:
    18.7% shared equally
    € 6,350.00 (West)
    € 5,700.00 (East)
    Up to € 593.73 (West)
    up to € 532.95 (East)
    Up to € 593.73 (West)
    up to € 532.95 (East)
    Unemployment insurance:
    3% shared equally
    € 6,350.00 (West)
    € 5,700.00 (East)
    Up to € 95.25 (West)
    up to € 85.50 (East)
    Up to € 95.25 (West)
    up to € 85.50 (East)