Wage entitlement of temporary employees
A number of different scenarios must be taken into account when establishing the principles that may give entitlement to a certain wage level or minimum pay.
National minimum pay in accordance with the Minimum Wage Act (MiLoG)
Pursuant to Art. 1 (1) of the Minimum Wage Act (Mindestlohngesetz - MiLoG) all employees are generally entitled to be paid not less than the minimum wage by their employer. The same right is vested in temporary agency workers if their employer (supplier) - whether domiciled at home or abroad - posts them to perform jobs in Germany.
Equal Pay and derogatory collective agreements
The first sentence of Art. 8 (1) of the Act on the Provision of Temporary Workers (Arbeitnehmerüberlassungsgesetz - AÜG) stipulates that temporary agency workers, for the whole duration of their secondment, are generally entitled to be paid at least the same wage that users of labour would have to pay their own employees in comparable jobs (equal pay principle). Where the employment relationship between temporary worker and employer (supplier of labour) is regulated by a collective agreement, the temporary worker shall, in derogation of the equal pay principle, receive the wage stipulated in such "derogatory" agreement. This principle also applies if the collectively agreed wage falls short of the wage that would have been due according to the equal pay principle (cf. Art. 8 (2) AÜG). The first sentence of Art. 8 (4) AÜG provides that the wage paid in accordance with a collective agreement may differ from the equal pay principle for the first nine months of posting and, where the conditions pursuant to the second sentence of Art. 8 (4) AÜG prevail, even for up to 15 months.
Wage floor pursuant to Article 3a of the Act on the Provision of Temporary Workers (AÜG)
The Ordinance on a Wage Floor in the Temporary Work Sector (Verordnung über eine Lohnuntergrenze in der Arbeitnehmerüberlassung - LohnUGAÜV) adopted pursuant to Art. 3a AÜG specifies minimum hourly remunerations that establish a wage floor for temporary workers.
If the equal pay principle is being applied during the period of posting because no derogatory collective agreement comes into play, the remuneration shall at least match the wage floor. The temporary employee is entitled to receive the minimum hourly remuneration that has been established as a wage floor (Art. 8 (5) AÜG).
This minimum hourly remuneration must likewise be guaranteed if the employment relationship comes under a derogatory collective agreement. Should the collectively agreed wage fall short of a minimum amount established pursuant to an applicable wage floor ordinance, workers are entitled to receive equal pay during their times of posting (cf. the fourth sentence of Art. 10 (2) AÜG), it being understood that application of the equal pay principle shall not lead to the wage floor being undercut. Likewise, any due date for payment of the minimum hourly remuneration set by a derogatory collective agreement shall not be later than the due date stipulated in the wage floor ordinance.
Along the same lines, Art. 8 (5) AÜG stipulates that temporary agency workers, also during periods without an assignment, are entitled to receive the minimum hourly remuneration that has been established as the wage floor, irrespective of any stipulations to the contrary in an employment contract or collective agreement.
The 4th Ordinance on a Wage Floor in the Temporary Work Sector (LohnUGAÜV4) will expire on 31 December 2022. Until then, from 1 October 2022, the national minimum wage of 12.00 euros applied instead of the minimum hourly wage specified there in accordance with Section 1 (3) MiLoG. On 1 January 2023, the 5th Ordinance on a Wage Floor in the Temporary Work Sector (LohnUGAÜV5) will come into force with the minimum hourly wage specified there.
Sector-specific minimum wages pursuant to the Act on the Provision of Temporary Workers (AEntG)
Where temporary workers are engaged in activities that come within the scope of a collective agreement declared to be generally applicable, as stipulated in item 1 of Art. 4 (1), Art. 5 and Art. 6 (2), or a statutory ordinance as stipulated in Art. 7, Art. 7a or Art. 11 of the Act on the Provision of Temporary Workers (Arbeitnehmer-Entsendegesetz - AEntG), the temporary worker must both be granted the conditions of employment defined in Art. 8 (1) and (5) AÜG, and be paid not less than the sector-specific minimum wage (cf. Art. 8 (3) AEntG).
With a view to establishing whether or not the temporary worker performs activities that come within the scope of a generally applicable collective agreement within the meaning of Art. 3 and 4 (1,1) and Art. 5 and 6 (2) AEntG, or of a legislative degree within the meaning of Art. 7, 7a or 11 AEntG, reference should be made to the definition and/or description of their activities in the relevant collective bargaining agreements or minimum wage ordinances. Where such regulations do not provide definitions of industry-specific activities, the relevant bargaining agreements or minimum wage ordinances should be interpreted as referring to the activity as such. If this approach places the activity within the scope of a generally applicable collective agreement or of a minimum wage ordinance in accordance with the AEntG, the employer’s minimum pay obligation shall comply with the rules such collective agreement and/or minimum wage ordinance lays down for remuneration of the activity in question.
If temporary workers, during their posting, perform multiple activities that come under different collective agreements or minimum wage ordinances, the principle of (relative) predominance during the balancing period (usually the calendar month) should be applied when determining the minimum wage. In other words: a worker who performs different activities during a certain period must, for the whole period, be paid the minimum wage established for the activity that (relatively) outweighs the other activities based on the number of hours spent on each of them.
If the assignment involves activities which are only partially covered by a minimum wage ordinance, the decision whether the minimum wage must be paid on the basis of that ordinance shall also be guided by the principle of relative predominance. Consequently, if the temporary agency worker, during the reference period, is predominantly engaged in activities to which no minimum wage ordinance applies, the wage privilege would not be regulated by Art. 8 (3) AEntG because there is no predominant activity that might give rise to a minimum wage entitlement within the meaning of the Posted Workers Act.
Conditions of Employment
Overview of Sector-Specific Minimum Wages
Precedence of Posted Workers Act (AEntG) and Act on the Provision of Temporary Workers (AÜG)
Article 1 (3) of the Minimum Wage Act (MiLoG) stipulates that the provisions of the Posted Workers Act (AEntG), the Act on the Provision of Temporary Workers (AÜG) and the statutory ordinances adopted in pursuance thereof shall prevail over those of the MiLoG, subject to the condition that the sector-specific minimum wages so agreed shall not fall short of the national minimum wage as specified in Art. 1 MiLoG. Where the provisions of AEntG and AÜG and of the statutory ordinances adopted in pursuance thereof take precedence, however, this primacy of law is not restricted solely to the amount of pay, but shall also cover all secondary obligations associated with it.
