The federal government has recently approved an ordinance providing for a progressive increase in the minimum wage (which is currently €9.35 gross per hour).

The measure establishes a 4-step increase in the mandatory minimum wage from 1 January 2020:

  • phase 1. increase to €9.50 gross from 1 January 2021;
  • phase 2. increase to €9.60 gross from 1st July 2021;
  • phase 3. increase to €9.82 gross from 1st January 2022;
  • phase 4. increase to €10.45 gross from 1st July 2022;

 

During the press conference held by Federal Minister Hubertus Heil (Minister of Labour and Social Affairs) to announce the adoption of this new measure, Heil said that: “The adjustment proposed by the Minimum Wage Commission is based on the development of collective agreements, but at the same time takes into account the economic uncertainties of the covid-19 pandemic.

The increase was planned in four stages to ensure a sustainable distribution of the resulting increases in wage costs for companies and at the same time constantly improve the minimum protection of employees over the next two years.

The Minister also show confidence and he did not rule out further increases in the near future. Therefore, based on the assessment of the minimum wage, the commission will make further proposals to expand the minimum wage law so that the minimum salary can continue to grow rapidly.