EXPLAINED: When will Germany raise the minimum wage?

The pledge to raise wages for Germany’s lowest earners to €12 per hour was a key electoral promise for Olaf Scholz’s SPD party, and now it looks set to come into force later this year. Here's what you need to know.

EXPLAINED: When will Germany raise the minimum wage?
A woman vacuums a corridor in a hotel. Photo: picture alliance/dpa | Daniel Reinhardt

What’s going on?

On Wednesday, the German government wants to begin the process of raising the minimum wage to €12 per hour. The cabinet has approved a bill put forward by Labour Minister Hubertus Heil (SPD) that will see the minimum wage hiked in Germany on October 1st this year. 

Isn’t the minimum wage already set to rise?

That’s right. On January 1st 2022, the minimum wage in Germany increased from €9.60 to €9.82 and it is set to rise again on July 1st to €10.45. These increases were laid out in a law which came into force in November 2021, following the guidelines of the Minimum Wage Commission which decides on the regular increases to earnings on the basis of previous wage development.

READ ALSO: EXPLAINED: How the minimum wage will increase in Germany in 2022

But the plan to hike the minimum wage up to €12 is a change from the usual procedure and will mark a one-off increase of around 15 percent. When introducing the draft bill, Germany’s labour minister Hubertus Heil said that the minimum wage in Germany was below average compared to the rest of Europe – the additional increase of €1.55 is a one-time law would help address this.

According to the draft, the minimum wage will remain unchanged for 15 months and the next increase, due on January 1st 2024 will again be decided by the Minimum Wage Commission of employers and trade unions.

The plan for the one-time hike was a flagship pledge of the centre-left SPD in the run-up to the September 26th elections last year. It is one of the first and most significant policies of the new traffic-light coalition that is set to come into force.

Who will benefit from the €12 minimum wage?

According to the draft law, 6.2 million workers earn an hourly wage below €12 and around 111,000 are even dependent on basic income support despite full-time employment. The increase to €12 euros would help to ensure that all workers earn at least 60 percent of the average gross wage as, according to experts, a minimum wage that is below 60 percent of a country’s median wage could mean that many low-income earners end up poverty. 

READ ALSO: German employers weigh up legal challenge to €12 minimum wage

Those who are employed as so-called minijobbers will also benefit from the wage increase. The coalition agreement of the SPD, Greens and the FDP states: “In future, the mini-job limit will be based on a weekly working time of ten hours at minimum wage conditions. When the minimum wage is raised, it will be accordingly increased to €520.”

That means the increase from €450 to €520 per month for mini-jobs is also set to come into force with the minimum wage rise on October 1st.

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EXPLAINED: How Germany plans to make immigration easier for skilled workers

The German government has agreed on a set of reforms for the immigration of skilled workers, which was approved by the cabinet on Wednesday. Here's what they're planning.

EXPLAINED: How Germany plans to make immigration easier for skilled workers

What’s happening?

Germany is currently facing a dramatic skilled worker shortage, particularly in the health sector, IT, construction, architecture, engineering and building services. The German government currently expects that, by 2026, there will be 240,000 jobs for which there will be no qualified candidates.

In order to help plug the gap in the labour market, the coalition government has been proposing changes to immigration law for months.

In September, Labour Minister Hubertus Heil presented plans for a new points-based immigration system, that will enable non-EU workers to come to Germany to look for work even without a job offer, as long as they fulfil certain criteria, under a so-called “Opportunity Card” (Chancenkarte) scheme.

READ ALSO: Explained: How to apply for Germany’s new ‘opportunity card’ and other visas for job seekers

Now, the coalition government has agreed on a wide-ranging set of initiatives to help remove hurdles for skilled workers coming to Germany. The points were approved by the cabinet on Wednesday, who should then come up with a draft law in the first quarter of 2023.

What’s in the plans?

The central aim of the government’s plans is to make it easier for people from outside the EU to find a job in Germany.

In the draft paper, ministers distinguish between three so-called pillars, the first of which concerns the requirements that foreign specialists must meet in order to be allowed to work in Germany.

Until now, they have had to have a recognized degree and an employment contract, but the government wants to lower this hurdle.

The draft states: “For specialists who are unable to present documents relating to their professional qualifications or can only do so in part, for reasons for which they themselves are not responsible, an entry and residence option should nevertheless be created.” The competencies could then be finally examined once they have arrived in Germany.

A trainee electrician practices in a training centre in Cologne. Photo: picture alliance/dpa | Oliver Berg

The second pillar involves skilled workers from abroad who do not yet have a degree but already have a lot of professional experience.

For employees in the information and communications technology sector, the requirement of having sufficient German language skills would be waived, and it would then be up to the managers of the company making the job offer to decide whether or not they want to employ the skilled worker despite a lack of German language skills. 

READ ALSO: ‘More jobs in English’: How Germany could attract international workers

The third pillar is about enabling third-country nationals with good potential to stay in Germany in order to find a job. The “Opportunity Card” falls under this pillar and will involve a new points-based system, which will allow non-EU nationals to come to Germany to look for work even without a job offer as long as they fulfil at least three of the criteria of having a degree or professional qualification, having experience of at least three years, having a language skill or previous residence in Germany and are under 35.

READ ALSO: How to apply for Germany’s new opportunity card and other visas for job seekers

What other initiatives do the plans include?

The traffic light coalition also wants to do more to promote Germany as an attractive, innovative and diverse country abroad.

One initiative is to publicise job vacancies internationally and connect qualified people abroad with employers and educational institutions in Germany. 

READ ALSO: Will immigration reform be enough to combat Germany’s worker shortage?

The “Make it in Germany” portal, which has its own job exchange, will be expanded and further developed.

The government also wants to promote the German language both abroad and at home for example, by expanding digital language courses and exams.

The government also wants to simplify and accelerate the recognition procedures for foreign vocational qualifications. One of the planned measures is that the required documents can also be accepted in English or in the original language.