Federal Labor Court: Minimum wage even with continued payment of wages and vacation
In a recent decision dated May 13, 2015, the Federal Labor Court set the course for the handling of the minimum wage law with regard to the continued payment of wages on public holidays and in the event of incapacity to work, as well as for the calculation of vacation compensation.
The decision does not directly affect the provisions of the Minimum Wage Act, which has been in force since January 1, 2015. Rather, the subject of the decision was an employment relationship which, due to a minimum wage regulation of the Federal Ministry of Labor and Social Affairs, fell within the scope of an industry-related collective agreement regulating the minimum wage (TV minimum wage). This stipulated a minimum hourly wage of €12.60 gross. However, the employer only paid this for hours actually worked and for periods of vacation. On working days that were missed due to public holidays or due to incapacity to work, the employer paid the individual contractual remuneration, which was lower than the remuneration according to the TV minimum wage. The employer also only based the holiday compensation on the lower individual contractual remuneration.
The Federal Labor Court put a stop to this approach. The Federal Labor Court has decidedthat the affected employee can also claim remuneration in the amount of the minimum hourly remuneration according to the TV minimum wage for working hours that are lost due to a public holiday or due to incapacity to work. This follows from the loss of remuneration principle of the Continued Payment of Remuneration Act (Section 2 Paragraph 1, Section 3 in conjunction with Section 4 Paragraph 1 EFZG). The same applies to the calculation of vacation compensation. The amount of holiday compensation is calculated according to the reference principle from the average remuneration of the last 13 weeks (Section 11 BUrlG). According to the Federal Labor Court, the provisions of the Continued Payment of Wages Act and the Federal Holiday Act are also applicable if the amount of wages is based on a minimum wage regulation that does not contain any deviating provisions on continued payment of wages and vacation pay. In these cases, the employer cannot rely on a lower remuneration agreed in an individual contract.
The principles developed by the Federal Labor Court should be transferable to the minimum wage according to the Minimum Wage Act, which has been in force since January 1, 2015. This too (like the TV minimum wage) does not contain any different provisions for calculating continued payment of wages and vacation pay or vacation compensation. Therefore, the employer cannot refer the employee to any agreed lower individual contractual remuneration for times of loss of work on public holidays and in the event of incapacity to work and for the calculation of holiday compensation, but must calculate the continued payment of wages and holiday compensation on the basis of the statutory minimum wage.