The minimum wage in 2026 brings changes for employment contracts, mini-jobs, and midi-jobs. Learn what employers need to consider regarding documentation obligations, working time recording, and sector-specific minimum wages.
Minimum Wage 2026: What Employers and Employees Need to Know Now
The statutory minimum wage has been a central element of German employment law since its introduction in 2015. The regular adjustments by the Mindestlohnkommission (Minimum Wage Commission) have far-reaching implications for employment contracts, mini-job thresholds, and operational organisation. This article provides a comprehensive overview of the current status, the legal requirements, and the practical consequences for employers and employees.
The Statutory Minimum Wage: Current Status and Development
The Minimum Wage Commission
The level of the minimum wage is set every two years by the Mindestlohnkommission. It is composed on a parity basis of representatives from the employer and employee sides, together with a chairperson and two academic advisors. In its recommendation, the Commission is guided by collective bargaining developments and takes into account employee protection, competitive conditions, and the impact on employment.
Development of the Minimum Wage Level
Since its introduction, the minimum wage has increased significantly:
- 2015: 8.50 euros (introduction)
- 2017: 8.84 euros
- 2019: 9.19 euros
- 2020: 9.35 euros
- 2021: 9.50 euros (January), 9.60 euros (July)
- 2022: 9.82 euros (January), 10.45 euros (July), 12.00 euros (October, political increase)
- 2024: 12.41 euros
- 2025: 12.82 euros
The applicable rate is determined by the current Mindestlohnanpassungsverordnung (Minimum Wage Adjustment Regulation) and is binding on all employers.
Impact on Existing Employment Contracts
Automatic Adjustment
Where an employment contract contains a remuneration clause below the statutory minimum wage, it is automatically superseded by the minimum wage. The employee has a direct statutory entitlement to the minimum wage -- regardless of what was agreed in the employment contract. A contractual underpayment is invalid.
Contract Design
The following recommendations apply to employers:
- Review fixed hourly wages: For hourly wage agreements close to the minimum wage, regular review and adjustment is required.
- Convert monthly salaries: For fixed salaries, ensure that the effective hourly rate at the agreed working hours does not fall below the minimum wage. The relevant formula is: monthly salary / (weekly hours x 4.348).
- Allowances and supplements: Not all remuneration components count towards the minimum wage. Night supplements, overtime supplements, and expense allowances are generally excluded from the minimum wage calculation.
Exemptions from the Minimum Wage
Certain groups are exempt from the minimum wage:
- Trainees (the minimum training remuneration under § 17 BBiG applies instead)
- Mandatory interns within the framework of school, university, or vocational training
- Voluntary interns for a maximum of three months for orientation purposes
- Long-term unemployed in the first six months of employment
- Volunteers
- Minors without completed vocational training
Mini-Job Threshold and its Dynamic Adjustment
The Link to the Minimum Wage
Since October 2022, the mini-job threshold has been dynamically linked to the minimum wage. The formula is:
Minimum wage x 130 hours / 3 months = monthly mini-job threshold
This means the mini-job threshold rises automatically with every minimum wage increase. The threshold is always rounded up to full euro amounts.
Practical Implications
The dynamic linkage has considerable practical consequences:
- Working time planning: Mini-jobbers may continue to work only the number of hours derived from dividing the mini-job threshold by the minimum wage.
- Contract adjustment: Existing mini-job contracts must be reviewed upon minimum wage increases -- either the hourly rate is raised or the number of hours is reduced.
- Social insurance: If the mini-job threshold is exceeded, a standard social insurance-liable employment relationship arises.
Midi-Job Regulations and Transition Zone
The transition zone (formerly sliding scale zone) for midi-jobs extends from the mini-job threshold to a monthly income of 2,000 euros. In this range, reduced employee social insurance contributions apply while full benefit entitlements are maintained.
The adjustment of the mini-job threshold also automatically shifts the lower boundary of the transition zone. Employers should check whether employees move from mini-job to midi-job status as a result of minimum wage increases and make the corresponding social insurance adjustments.
Documentation Obligations under § 17 MiLoG
Working Time Recording
The Mindestlohngesetz (Minimum Wage Act) obliges employers in certain sectors and for certain forms of employment to record working times. The obligation applies to:
- Mini-jobbers (§ 17 Abs. 1 MiLoG) -- regardless of sector
- Employees in the sectors listed in § 2a Schwarzarbeitsbekämpfungsgesetz (including construction, hospitality, transport, building cleaning, and the meat industry)
- Employees with a monthly salary below 4,176 euros gross in the listed sectors
Content and Form of Records
The records must contain the following information:
- Start, end, and duration of daily working time
- Recording no later than the end of the seventh day after the day the work was performed
- Retention obligation of at least two years
Records may be kept electronically or on paper. There is no formal requirement, but the documentation must be comprehensible and complete in the event of an inspection by the customs authority.
Note: Independently of the MiLoG, the ECJ has recognised a general obligation for systematic working time recording in its case law. The BAG has confirmed this for German law (decision of 13.09.2022, ref. 1 ABR 22/21). Employers should therefore implement a comprehensive time recording system.
Sector-Specific Minimum Wages
In addition to the general statutory minimum wage, numerous sectors have collective bargaining minimum wages that exceed the statutory minimum wage and are made binding on all employers in the sector through declarations of general applicability or statutory orders under the Arbeitnehmer-Entsendegesetz (AEntG).
Affected Sectors (Selection)
- Construction industry: Significantly above the statutory minimum wage, graduated by qualification (labourer/skilled labourer)
- Electrical trade: Sector-specific minimum wage
- Building cleaning: Differentiated between interior and glass/facade cleaning
- Care sector: Specific minimum wages by qualification (care assistants, qualified care assistants, qualified nurses)
- Roofing trade: Sector-specific minimum wage
- Painting and decorating trade: Graduated by qualification
Important: The higher minimum wage applies. Where the sector minimum wage exceeds the statutory minimum wage, the sector minimum wage is determinative.
Enforcement and Control by Customs
The Financial Control of Undeclared Work (FKS)
Compliance with the minimum wage is monitored by the Finanzkontrolle Schwarzarbeit (FKS) of the customs authority. The FKS has extensive powers:
- Right of access to business premises and workplaces
- Inspection of business records, working time documentation, and payroll records
- Questioning of employers and employees
- Cooperation with other authorities (tax office, social insurance bodies, immigration authority)
Fines and Sanctions
Violations of the Minimum Wage Act can be penalised with substantial fines:
- Non-payment or late payment of the minimum wage: up to 500,000 euros
- Violations of documentation obligations: up to 30,000 euros
- Violations of notification obligations: up to 30,000 euros
Furthermore, companies with fines of 2,500 euros or more may be excluded from public procurement.
Liability of the Principal
Particularly relevant for companies working with subcontractors: Under § 13 MiLoG, the principal is liable as a guarantor for compliance with the minimum wage by its subcontractors. This general contractor liability extends across the entire subcontractor chain.
Practical Compliance Checklist for Employers
Immediate Measures upon Minimum Wage Increase
- Review remuneration agreements: Identify all employment contracts with hourly wages close to the minimum wage
- Convert monthly salaries: Verify the effective hourly rate for all fixed salaries
- Adjust mini-job contracts: Correct hours or hourly rate
- Consider midi-job thresholds: Check for transitions from mini-job to midi-job
- Update payroll software: Enter new rates
Ongoing Obligations
- Implement time recording system: Electronic recording of start, end, and duration of working time
- Retain documentation: At least two years; four years recommended for construction and other high-risk sectors
- Train HR staff: Regular updates on current minimum wage rates and obligations
- Review subcontractor agreements: Contractual assurance of minimum wage compliance by subcontractors
- Monitor sector minimum wages: Regular checks for new declarations of general applicability
Conclusion
The minimum wage in 2026 is more than a mere wage adjustment. The dynamic linkage to the mini-job threshold, the enhanced documentation obligations, and the rigorous enforcement by customs make careful operational implementation indispensable. Employers who adapt their processes early and establish a robust compliance system not only avoid fines but also create legal certainty in the employment relationship.
compleneo supports you with combined expertise in employment law and tax advisory on all questions relating to the minimum wage. From reviewing your employment contracts and implementing compliant time recording systems to advising on customs inspections -- we ensure your company is compliantly positioned.
