The German Trade Union Confederation (DGB) has calculated that minimum wage violations over the past ten years have cost employees, social security funds and the tax authorities up to €64 billion.
Germany's minimum wage was introduced in 2015 and is currently set at €13.90 per hour. In theory, almost all workers in Germany should earn at least this much for their labour. There are only a few specific exceptions, for example for interns.
The DGB estimates that around six million people currently work minimum wage jobs in Germany, mainly in restaurants, trade or agriculture.
But a large survey of employees by the DGB suggests that around two million workers effectively earn less than the minimum wage each year. This in turn suggests that Germany's workers' protections are not as ubiquitous as they seem, and that more serious enforcement is needed for wage limits to be effective.
Immigrants and new arrivals are particularly vulnerable to minimum wage violations because they more often work low wage jobs and are less likely to be familiar with German labour law.
Two million people with losses
The DGB's findings were based on an annual survey of around 30,000 people in 20,000 households. From information on working hours and earnings, the DGB experts calculated that a significant number of workers were brining home less earnings than should be guaranteed by the statutory minimum wage.
According to the DGB, this has affected an average of two million employees per year since the introduction of the minimum wage.
At least some of which is due to illegal practices by employers, such as not recording working hours in full.
From affected workers an average of €1.70 to €2.40 per hour was missing.
On this basis, the DGB estimates that a total of around €64 billion in unpaid wages was withheld by employers from 2015 to 2024.
From that sum, affected employees would actually have been entitled to an additional €35 billion in take home pay. Additionally, €22 billion would have been owed to social security funds and €7 billion owed in income tax.
Immigrants more vulnerable to wage violations
Immigrants and foreigners, especially more recent arrivals, are more likely to be victims of wage and labour law violations, partially because they are less likely to be familiar with their rights under German law. This trend has been highlighted in research findings from the German Institute for Economic Research (DIW) and the Institute for Applied Economic Research (IAW) among others.
Gig- and subcontracted workers, including delivery drivers, are known to be particularly at risk. Contracted gig-work, which sometimes pay per delivery or per unit of work rather than per hour of labour, may end up amounting to less than €13.90 per hour on average.
Paying employees in this way, without guaranteeing at least the minimum wage, is illegal under German law, but some companies have managed to avoid accountability by outsourcing the hiring and managing of their workforce to middle-firms that can be dissolved if and when legal disputes arise.
Research by the Friedrich-Alexander University (FAU) in Erlangen / Nuremberg found that the pay gap for first generation immigrants in Germany is 19.6 percent. The study, which was published in the science journal Nature, suggested that three quarters of the salary difference was due to immigrants being less likely to be employed in highly-paid positions.
'Not a trivial offence'
According to DGB Vice President Stefan Körzell, at least part of workers' missing wages is due to wage theft: "Part of the payment gap is due to criminal actions by employers who do not comply with their legal obligations."
He added, "Minimum wage violations are not a trivial offence - they must be rigorously prosecuted and severely punished."
Responsible for policing wage violations in Germany is the Federal Customs Administration, and its office known as the Financial Control of Undeclared Employment (Finanzkontrolle Schwarzarbeit - FKS).
According to the latest report by the Minimum Wage Commission, in 2024 almost 6,200 investigations were initiated on suspicion of violations of the Minimum Wage Act.
But the DGB complains that the FKS is chronically understaffed. Some 2,500 positions approved by the Bundestag are not filled at the FKS, according to the Minimum Wage Commission. Statistically, companies in Germany can expect an inspection once every 140 years.
The General Customs Directorate in Bonn told the German press agency that the FKS follows the principle of "quality over quantity": using their resources for fewer, but more targeted controls, which ultimately bring more "substantial investigative proceedings".
If you, or someone you know, believes your employer is violating the Minimum Wage Act, you can get information about your rights by calling the Minimum Wage Hotline, available at +49 30 60 28 00 28.
It is also possible to bring a complaint to the labour court without a lawyer. Members of trade unions or works councils can often receive support from these groups.
With reporting by DPA.
