1. How to define a Minimum Wage … Experiences from Germany and other European Countries
Dr. Thorsten Schulten
Association of Free Trade Unions of Slovenia (ZSSS)
Friedrich Ebert Stiftung
International Conference on Minimum Wages Ljubljana, 16 June 2015

2. Content Minimum Wages in Europe Problems of Comparison
How to define a minimum wage? Views of the European Court of Justice Experiences from Germany and other European Countries
Dr. Thorsten Schulten

3. National Minimum Wages in Europe (per hour, in Euro, January 2015)
Dr. Thorsten Schulten

4. National Minimum Wages in Europe Problems of Comparison
Comparison in Euro Influenced by exchange rate
Different costs of living
Dr. Thorsten Schulten

5. National Minimum Wages in Europe (per hour, in Purchasing Power Parities, January 2015)
Source: WSI Minimum Wage Database 2015
Dr. Thorsten Schulten

6. National Minimum Wages in Europe Problems of Comparison
Comparison in Euro Influenced by exchange rate
Different costs of living
Different relative values In comparison to average or median wages
Dr. Thorsten Schulten

7. Relative Level of Minimum Wages Minimum wage in % of median wage, 2013
Dr. Thorsten Schulten

8. Relative Level of Minimum Wages Minimum wage in % of median wage, 2013
Dr. Thorsten Schulten

9. National Minimum Wages in Europe Problems of Comparison
Comparison in Euro Influenced by exchange rate
Different costs of living
Different relative values In comparison to average or median wages
Different scope of the minimum wage Exclusion of certain groups of workers
Different definitions of minimum wages Which wage components are included and which not?
Dr. Thorsten Schulten

10. Content Minimum Wages in Europe Problems of Comparison
How to define a minimum wage? Views of the European Court of Justice Experiences from Germany and other European Countries
Dr. Thorsten Schulten

11. Minimum Wage in Germany
New Statutory Minimum wage of 8,50 Euro per hour (from 1 January 2015) German Minimum Wage Act include no definition of a minimum wage, but refers to the Law on Posted Workers German Government says that the definition of a minimum wage has been has been clarified by jurisdiction of the European Court of Justice and the German Federal Labour Court
Dr. Thorsten Schulten

12. How to define a minimum wage?
European Posted Workers Directive (96/71/EG)
“For the purposes of this Directive, the concept of minimum rates of pay … is defined by the national law and/or practice of the Member State to whose territory the worker is posted” (Article 3).
Dr. Thorsten Schulten

13. How to define a minimum wage?
Jurisdiction of the European Court of Justice
Case C341/02: Commission v. Germany, 14 April 2015
Case C‑522/12: Isbir v. DB Services GmbH, 7 November 2013
Case C‑396/13: Sähköalojen ammattiliitto ry v. Elektrobudowa Spółka Akcyjna 12 February 2015
Dr. Thorsten Schulten

14. How to define a minimum wage?
European Court of Justice
Case C341/02
Commission v. Germany (14. April 2005)
“It is entirely normal that, if an employer requires a worker to carry out additional work or to work under particular conditions, compensation must be provided to the worker for that additional service without its being taken into account for the purpose of calculating the minimum wage.” (Recital 40)
Dr. Thorsten Schulten

15. How to define a minimum wage?
European Court of Justice
Case C341/02
Commission v. Germany (14. April 2005)
Judgment follows the principle that minimum wages can include all wage components “which do not alter the relationship between the service provided by the worker and the consideration which that worker receive in return.” (Recital 43)
Every work which is in addition to normal work can not be include in the minimum wage and has to be paid extra !!!
Dr. Thorsten Schulten

16. How to define a minimum wage?
European Court of Justice
Case C‑522/12
Isbir v. DB Services GmbH, (7 November 2013)
“In that regard, the Court held that it was normal that, if an employer requires a worker to carry out additional work or to work under particular conditions, compensation must be provided to the worker for that additional service without its being taken into account for the purpose of calculating the minimum wage.” (Recital 39)
Dr. Thorsten Schulten

17. How to define a minimum wage?
European Court of Justice
Case C‑396/13:
Sähköalojen ammattiliitto ry v. Elektrobudowa Spółka Akcyjna (12 February 2015)
“According to the Court’s settled case-law, allowances and supplements which are not defined as being constituent elements of the minimum wage by the law or practice of the Member State to whose territory the worker is posted, and which alter the relationship between the service provided by the worker, on the one hand, and the consideration which he receives in return for that service, on the other, cannot under the provisions of Directive 96/71, be considered to be elements of that kind” (Recital 36)
Dr. Thorsten Schulten

18. Calculation of the German Minimum Wage
“As a rule, those employer payments that are paid in compensation for the employee’s “normal work” are to be counted as components of the minimum wage. Payments that an employee receives as compensation for work beyond this may not be counted as part of the minimum Wage.“
German Ministry of Labour (2015)
Dr. Thorsten Schulten

19. Calculation of the German Minimum Wage
Can be considered
Can not be considered
Basic remuneration
Overtime bonuses
Lump-sum payments
Bonuses for night or weekend work
Guaranteed bonuses paid on a regular (monthly) basis
Bonuses for heavy and dangerous work
Annual bonuses (Christmas and holiday bonus)
Tips
Compensations for additional costs (e.g. work wear, work equipment, travel costs etc.)
Additional company pensions
Dr. Thorsten Schulten

20. Can Bonuses for Work during Nights, Sundays or Public Holidays be included into the Calculation of the Minimum Wage?
Non!
No!
Nee!
Nein!
Bonuses for work during special working times are not part of the minimum wage, but have to be paid extra !!!
Dr. Thorsten Schulten

21. Conclusion: Why a precise definition of the Minimum Wage is so important?
Fairness for Workers: Extra work should be paid extra!
Control and Enforcement: Unclear definitions give opportunities to circumvent the Minimum Wage Law
Dr. Thorsten Schulten

22. WSI Minimum Wage Database
Current Minimum Wage Data
from 30 Countries!
Available in English!
Dr. Thorsten Schulten 22

23. Contact and Further Reading …
Social Europe 9 April 2015
New Book
FES-Studies
Dr. Thorsten Schulten
Dr. Thorsten Schulten 23