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Minimum wage even for non-working time – a signal from the German Federal Labour Court

The new Minimum Wage Act (Mindestlohngesetz (MiLoG)) raises a number of questions including how to deal with lost working time due to public holidays, sick leave or annual leave. Does the employer need to pay the statutory minimum wage for such non-working time?

It may take a while until the Federal Labour Court clarifies these issues with regard to the Minimum Wage Act. However, minimum wage requirements have already been implemented in other sectors. For this reason, particular attention should be paid to any current decisions dealing with minimum wage issues in these sectors.

Such a decision is the recent judgment by the Federal Labour Court (Bundesarbeitsgericht) dated May 13, 2015 (docket number 10 AZR 191/14) on continued payment of the wages of a pedagogical employee. According to the Minimum Wage Regulation (Mindestlohnverordnung) of the Federal Ministry of Labour and Social Affairs, her employment relationship was within the scope of the collective bargaining agreement regulating the minimum wage for pedagogical staff, providing for a minimum hourly wage of EUR 12.60. Her employer paid accordingly for actually worked time as well as for holidays, but not for lost working time on public holidays or in case of sickness. The employer also did not pay the minimum wage in lieu of holidays; instead, the lower wage which was agreed in her employment contract was paid. The Federal Labour Court held these lower wage payments invalid: Referring to the Continuation of Payment Act (Entgeltfortzahlungsgesetz), the employer must pay the minimum wage for working time that is lost due to public holidays or sickness of the employee. Based on the provisions of the Federal Holiday Act (Bundesurlaubsgesetz), this duty shall also apply to payment in lieu of holidays. According to the court, no further specific provisions are required in the Minimum Wage Regulation. Thus, the employer is prohibited from paying below minimum wage for non-working time.

This judgment might be a hint regarding the interpretation of the Minimum Wage Act. Although section 2 of the Act (regulating the due date for payment of the minimum wage) refers to “actually worked hours”, it seems likely that the Federal Labour Court will apply these principles.