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There is no way around it

As the nationwide statutory minimum wage of EUR 8.50 has been in force for a good two months now, the first court cases dealing with minimum wage issues start rolling in.

According to a recent decision by the Berlin labour court (Arbeitsgericht Berlin, ArbG), additional vacation pay and annual additional payments will not count towards the minimum wage entitlement (judgment dated 4 March 2015, docket number 54 Ca 14420/14).

In the case before the court, the employee earned an hourly wage of EUR 6.44 plus additional payments relating to performance and work in shifts. Furthermore, she received additional vacation pay as well as a yearly additional payment, the amount of which was tied to years of service. Late last year, when the Minimum Wage Act was passed, her employer terminated the employment contract and offered her continued employment with altered conditions. Under these altered conditions, she was to receive an hourly minimum wage of EUR 8.50 (as required by the Minimum Wage Act), but she would not be granted the additional payments previously granted for performance, vacation and long service. The Berlin labour court found the dismissal invalid. According to the court, additional payments that are not as such intended to compensate employees for their work may not be counted towards the minimum wage. A dismissal and offer of continued employment under altered conditions for this purpose was therefore considered invalid. As a result, the employee will continue her employment with the employer and is entitled to an hourly wage of EUR 8.50 plus any additional payments as before.

If would like to know more about the new statutory minimum wage in Germany, please refer to our overview here:

https://blogs.dlapiper.com/employmentgermany/2014/12/29/minimum-wage-from-1-january-2015-part-i/

https://blogs.dlapiper.com/employmentgermany/2014/12/30/minimum-wage-from-1-january-2015-part-ii/

We will keep you posted about any new developments.