Many employees ask themselves whether premiums paid by the employer are „minimum wage effective“.
In its ruling of 8 November 2017, the 5th Senate of the Federal Labour Court (Bundesarbeitsgericht) ruled under file number 5 AZR 692/16 that at least certain bonuses are effective as minimum wages if the employer also rewards the work performance by paying these bonuses.
The Federal Labour Court had to decide on the minimum wage effectiveness of a so-called „Immerda premium“, a premium for order and cleanliness and a „empties premium“.
The Federal Labour Court decided in the specific case that the employer not only rewards the mere presence of the employee in the company by paying the so-called „Immerda premium“, but also the performance of the work.
In the opinion of the Federal Labour Court, the premium for order and cleanliness is also a consideration for an employee’s performance, namely the keeping clean and disinfection of the motor vehicle used for the performance of the work.
And also the paid „empties premium“ is consideration for a work performance of the employee, since it honours the proper completion of the returned empties.
The decisive factor for minimum wage effectiveness is always that the respective premium payments remain with the employee for good. It should also be pointed out in this context that only premiums paid in cash can be effective as a minimum wage, unless they are performed regardless of the actual work performed or have a legal basis, such as holiday or night work bonuses.
In contrast, benefits in kind provided by the employer are generally not minimum wage effective and must therefore not be taken into account when determining whether the respective minimum wage is paid.
All information about the minimum wage in Germany can be found on our overview page.
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