A year and a half after Germany’s landmark introduction on 01 January 2015 of a national minimum wage, the country’s Federal Salaries Commission delivered its first ruling where, as of 01 January 2017, the legal minimum wage rate will increase 34 cents from the current €8.50 an hour to €8.84. In line with its mandate, the independent Commission that comprises both employers and unions representatives based its slightly more generous than expected decision on the average rise in hourly wages negotiated by the social partners between January 2015 and June 2016. The Confederation of German Trade Unions (DGB) termed it a ‘reasonable’ increase, whereas the services union Verdi called it ‘insufficient’.
Seven cents more than expected. The decision was eagerly awaited and came in slightly above expectations German media of €8.77. By law, the joint commission comprising three representatives each from the employers and the unions as well as two non-voting experts plus a ‘neutral’ president has a clear mandate, namely to propose a bi-annual revision of the minimum wage based on the average hourly wage increase that is negotiated by the social partners within the framework of the collective agreements (‘Tarifindex’).
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