New in 2020 Minimum Wage and Minimum Remuneration for Trainees

There are also legislative changes in the field of labour law in 2020. The most important changes for employees and trainees are the increase in the minimum wage and the introduction of minimum remuneration for trainees.Increase in the minimum wageBefore the introduction of the minimum wage in the Federal Republic of Germany in 2015, there was no lower limit for wages in the low wage sector. Millions of employees have benefited from the introduction of the minimum wage and now have the possibility to achieve a stable income without placing an unreasonable burden on the employer with excessive amounts. The aim of introducing the minimum wage was also to ensure that intense competition between companies is not carried out at the expense of employees and that wage dumping is prevented. A uniform nationwide minimum wage also strengthens the stability of the social security systems and promotes social cohesion.On the recommendation of the Minimum Wage Commission, the government decided to increase the minimum wage by the Second Minimum Wage Adjustment Ordinance of 13 November 2018, taking particular account of the economic situation and the general development of collectively agreed pay in Germany.Since 1 January 2019 a minimum wage of 9.19 euros gross per hour has applied nationwide. A further increase to 9.35 euros gross per hour has applied since 1 January 2020. Under the Minimum Wage Act, the statutory minimum wage is to be adjusted again with effect from 1 January 2021.Entry into force of minimum remuneration for traineesTrainees also benefit from the introduction of minimum remuneration for trainees in 2020. This minimum remuneration is also to be increased gradually in subsequent years so that the training market can adjust to the minimum remuneration.Minimum remuneration is introduced in 2020 for new in company and out of company training contracts. The aim of the introduction of minimum remuneration is to make vocational training more attractive again. For many years vocational training in the Federal Republic of Germany has been one of the most successful qualification systems worldwide. However, more and more young adults are choosing university studies instead of vocational training. The amendment of the Vocational Training Act is intended to make vocational training more attractive in the future.In addition to minimum remuneration, transparent training levels with new designations are to be introduced to demonstrate the equivalence of vocational training and university study. At the same time, vocational training opportunities are to be made more understandable internationally.The introduction of minimum remuneration is the core element of the amendment. Trainees are to receive the recognition they deserve for their work during training. Specifically, the minimum remuneration rules provide that trainees starting their training in 2020 generally receive statutory minimum remuneration of 515 euros in the first year of training, with lower amounts permissible only on the basis of a corresponding change in a collective agreement.The statutory minimum remuneration is to be increased annually in stages, in each case depending on the year in which the training begins:Start of training in 2020 monthly minimum remuneration of 515 eurosStart of training in 2021 monthly minimum remuneration of 550 eurosStart of training in 2022 monthly minimum remuneration of 585 eurosStart of training in 2023 monthly minimum remuneration of 620 eurosIncreases from 2024 onwards will be published annually in November of the preceding year in the Federal Law Gazette. The annual adjustment will be based on the average development of overall training remuneration.The annual minimum remuneration amounts apply to the first year of training. Adjustments for the second, third and fourth years of training will be made depending on the contribution to value creation in the company by way of surcharges on the amount applicable in the year of commencement of training.In summary, the introduction of minimum remuneration for trainees is intended to protect and promote those trainees who have not previously been covered by collective agreements and who have received only low remuneration. The introduction of minimum remuneration also makes vocational training more attractive. Trainees in these occupations are very much in demand in Germany, especially in times of shortages of skilled workers.Attorney at law Hans Jörg Briest and his team in Berlin will inform you about further changes and will advise and support you in asserting your claims in labour law and in other labour court proceedings.