Uncovered: Thousands Skirt Minimum Wage with Deception and Exploitation
Multitudes defrauded of lawful minimum wages owed
By Chris Lohner | * raw truth * social media share * messenger share * email * print * link copy
The ongoing debate about increasing the minimum wage within the new federal government has stirred controversy since coalition negotiations. Currently, all workers aged 18 and over are entitled to at least €12.82 per hour gross, with some exceptions. Yet, countless eligible workers receive below the minimum wage - not just through black-market labor, but also through manipulation of employment records and wage relationships. Fear of losing jobs forces some victims into active participation in these illicit practices.
Just How Many Employees are Affected?
Minimum wage violations happen unseen, making exact numbers elusive. Approximately six percent of eligible claimants may have received less than the minimum wage in 2021, according to DIW expert Johannes Seebauer, speaking on ntv.de. If, on the contrary, data from employer surveys from the beginning of 2022 is taken into account, about 800,000 workers, or two percent of eligible employees, were underpaid.
Monitoring and Enforcement
The Financial Control Schwarzarbeit of the Customs (FKS) ensures adherence to the Minimum Wage Law. In 2021, they initiated 2,759 administrative offense proceedings for non-payment of the statutory minimum wage, per an ntv.de spokesperson. Beyond these, there are also violations, such as failing to record mandated hours.
Loopholes in Minimum Wage Compliance
Seebauer claims the greatest loophole for circumventing the minimum wage is the recording of working hours. "An orderly documentation often doesn't take place and is difficult to check or easily manipulable: breaks are not calculated correctly, preparation times are not paid, etc."
In addition to regular checks, the FKS conducts nationwide and regional focus checks. Fines of up to €500,000 could be imposed for violations. However, efficient checks are hampered by lack of personnel, the DIW states.
Methods of Minimum Wage Evasion
The Customs Service frequently discovers a variety of manipulative practices to evade minimum wage requirements:- Inadequate, false, or incomplete records of working hours- Standby or preparation times, along with empty runs, are not logged as working time- Employees are falsely classified as interns, trainees, or self-employed- Hiding the main operation of an enterprise to avoid branch minimum wages
The website minestlohnbetrug.de, created by former Left Member of the German Bundestag Victor Perli, lists several other methods, including:- Unrealistic performance requirements, making the piecework impossible- Wage deductions for poor work or tool/apparel costs- Employers charging high material or food costs and then deducting these from wages- Staging insolvencies in the construction industry, leaving workers - especially those from abroad - unable to recover their wages
Economists Demand Increased Scrutiny and Higher Minimum Wage
Even though some employees voluntarily accept pay below the minimum wage, others claim to receive the minimum wage during inspections out of fear of losing their job.
Victims Across Industries
Unreported work and illegal employment are prevalent in almost every economic sector, according to the Customs Service spokeswoman. They focus their investigations on industries like construction, hospitality, transportation, and building cleaning.
Affected workers particularly include:- Those participating in temporary activities- Small businesses- Women- Foreigners- Young and old workers with low education or living in eastern regions of Germany
Exemptions from Minimum Wage Requirements
Exempt from the minimum wage claim are apprentices, self-employed individuals, employees in voluntary service or at workshops for people with disabilities, volunteers, participants in measures to promote employment, and long-term unemployed individuals in the first six months after re-entry if working in a branch with an agreed branch minimum wage. In such cases, they receive the branch minimum wage immediately. Apprentices may only be eligible for the minimum wage under specific conditions.
Source: ntv.de
- Minimum wage
- Customs investigators
- DIW
Additional Information
While there is no extensive data on specific industries affected by minimum wage violations, regulations and mechanisms are in place to monitor and enforce compliance. The Minimum Wage Commission plays a vital role in establishing and adjusting the minimum wage to fairly compensate workers.
- Regulations and enforcement:
- The German law on minimum wage (Mindestlohngesetz) has been in force since 2015, enforcing a minimum wage of €12.82 per hour, effective January 1, 2025[4][5].
- Employers must regularly pay salaries on time, with penalties for non-compliance[5].
- Affected sectors:
- Generally, sectors with precarious or informal work arrangements, such as hospitality, construction, and agriculture, are thought to be more vulnerable to minimum wage violations due to their nature of work. However, specific data on which sectors are most affected is not provided in the search results.
- Undeclared work is a significant issue in Germany, contributing to the shadow economy, which might also be related to minimum wage violations[3].
- The Community is urged to scrutinize local businesses more rigorously, particularly in the sectors often associated with undeclared work such as hospitality, construction, and agriculture, to prevent minimum wage evasion.
- In light of the rising concern about minimum wage violations, vocational training programs could include courses on understanding financial aspects, including wage regulations, to empower employees and foster a culture of fair employment.
