Minimum wage rises to 12 euros on October 1st

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    The Bundestag has decided to increase the statutory minimum wage to twelve euros from October 1st. For around six million people, this is “possibly the biggest jump in wages of 22 percent in their lives,” said Labor Minister Hubertus Heil. The SPD politician also announced a collective agreement loyalty law to strengthen collective wages.

    The awarding of contracts to companies would thus be tied to the payment of a collective wage. This has been agreed in principle in the coalition agreement between the SPD, the Greens and the FDP, but has not yet been initiated. Employer President Rainer Dulger again accused the government of a breach of trust because the coalition, by setting the minimum wage limit, is undermining the minimum wage commission of unions and employers.

    The members of the coalition voted for the higher minimum wage, but so did the left. The Union abstained. The minimum wage is currently 9.82 euros. As of July 1, the lower wage limit will rise to EUR 10.45 under current law. According to Heil, women and employees in eastern Germany in particular will benefit from the increase to twelve euros from October. “Anyone who has previously earned gross 1,700 euros full-time on the basis of the minimum wage will receive 2,100 euros in the future,” said Heil. “It’s still not the world, but it’s noticeable in the wallet.”

    The earnings limit for the mini-jobs, which are tax and social security-free for employees, will also rise from 1 October from 450 euros to 520 euros per month. In future, they will also be automatically raised with further increases in the minimum wage. The FDP had insisted on extending the earnings limit in return for raising the minimum wage. In March there were almost 7.2 million mini-jobbers, 3.1 million of them in part-time jobs.