Minimum wage also applies to public holidays and night work premiums

Remuneration on public holidays, as well as night work premiums, which are based on the actual hourly earnings must be calculated at least on the basis of the minimum wage. This is the result of a new judgment by the Federal Labour Court dated 20 September 2017 (docket number 10 AZR 171/16).

In the case at hand, the collective bargaining agreement provided for a night work premium amounting to 25% of the actual hourly earnings, and remuneration for holidays amounting to 1.5 times the average earnings of the employees. On 1 January 2015, when the Minimum Wage Act (Mindestlohngesetz, MiLoG) came into force, the defendant paid a “Minimum Wage Act allowance” in addition to the contractual hourly earnings of  € 7.00 or € 7.15 for the month, but continued to calculate remuneration for public holidays and holidays as well as the night work premium for five hours from the lower contractual hourly remuneration. In addition, he credited a paid holiday allowance against the minimum wage. In her complaint the plaintiff successfully – apart from a small difference in calculation – appealed against this behaviour.

Although the Minimum Wage Act only grants entitlements for hours actually worked, the employer also has to pay the statutory minimum wage for remuneration on public holidays. This is a consequence of the German “loss of earnings principle”, which says that the employer has to pay the amount of remuneration the employee would have received without the loss of work for working time which is cancelled due to a public holiday. Since the collective bargaining agreement refers to the “actual hourly earnings” for a night work premium and for remuneration on holidays, they also have to be calculated at least on the basis of the statutory minimum wage. However, the paid holiday allowance cannot be credited against minimum wage entitlements, because it is not payment in return for the hours worked, unlike a Sunday and public holiday premium or overtime premiums, due to former judgments.

With this further fundamental judgment, the Federal Labour Court is continuing its case law on the Minimum Wage Act and strengthening the rights of employees.