What role does the minimum wage law play in payroll processing?
February 21, 2023 | 40,00 EUR | answered by Elvira Klinger
Dear tax consultant,
My name is Irmgard Ratzberg and I work as a HR manager in a medium-sized company. Lately, I have been dealing intensively with the topic of payroll and have come across the Minimum Wage Act. I wonder what role this law plays in payroll and what impact it could have on our company.
So far, we have always calculated wages based on collective agreements, ensuring that all employees are fairly compensated. However, I have heard that the Minimum Wage Act sets certain minimum requirements for employee compensation and that violations of these regulations can lead to significant penalties.
I am concerned that we may not correctly implement all the requirements of the Minimum Wage Act and could therefore face legal difficulties. That's why I would like to know from you what specific obligations arise from the Minimum Wage Act and how we can ensure that we meet these obligations.
Can you give me tips on how to structure payroll in a way that meets the requirements of the Minimum Wage Act? Are there any specific software or checklists that can help us with this? I would be very grateful if you could assist me in this matter.
Thank you in advance for your support.
Sincerely,
Irmgard Ratzberg
Dear Mrs. Ratzberg,
Thank you for your inquiry regarding the Minimum Wage Act and its impact on payroll in your company. The Minimum Wage Act is an important legal regulation that ensures that employees receive a fair minimum wage. It stipulates that every employee in Germany must receive a minimum wage per hour worked, which is currently set at 9.60 euros gross per hour.
The Minimum Wage Act obliges employers to pay their employees at least this legal minimum wage. It is important to note that the minimum wage cannot be undercut by collective bargaining agreements. If a collective agreement specifies a lower hourly wage, the legal minimum wage must still be paid.
Violations of the Minimum Wage Act can lead to significant penalties, so it is crucial that you, as the person responsible for personnel, ensure that your company complies with the legal requirements. To ensure this, I recommend conducting a thorough review of your payroll processes.
It is advisable to regularly review payroll to ensure that the minimum wage is being correctly paid and that there are no violations of the law. Additionally, you should ensure that all employee working hours are accurately recorded to ensure that overtime is correctly compensated.
To ensure that your payroll meets the requirements of the Minimum Wage Act, specialized software solutions and checklists can be a great help. These can assist you in accurately recording employee working hours, calculating the minimum wage correctly, and ensuring compliance with all legal requirements.
I recommend thoroughly familiarizing yourself with the Minimum Wage Act and, if necessary, seeking external advice to ensure that your payroll meets the legal requirements.
If you have any further questions or need assistance, I am happy to help.
Best regards,
Elvira Klinger
