The Posted Workers Act provides a legal framework for making sector-specific minimum wages obligatory for all employees of a sector regardless of whether the employer is based inside or outside of Germany.
Nine sectors have been included in protection by the Posted Workers Act:
- Construction industry proper and subsidiary construction industry
- Cleaning services
- Letter delivery services
- Security services
- Special mining work in anthracite mines
- Laundry services for third accounts
- Waste management including street cleaning and winter services
- Basic and further training services under Books Two or Three of the Social Code
- Long-term care sector (care for the elderly and out-patient nursing)
The Minimum Working Conditions Act (Mindestarbeitsbedingungengesetz) makes it possible to fix minimum remuneration for those branches of industry in which employers tied to collective agreements employ fewer than 50% of the employees nationwide who fall under the scope of all collective agreements.
A permanent steering committee examines whether social distortions are present within a branch of industry and decides whether minimum remuneration will be laid down, modified or lifted for this branch of industry.
An expert committee consisting of representatives of the branch of industry may then set down the actual amount of the respective minimum wage by means of an order based on prescribed criteria. At the proposal of the Federal Ministry of Labour and Social Affairs, the Federal Government can enact the minimum remuneration decided by the expert committee by means of a legal ordinance.
The minimum remuneration is mandatory and inalienable for all domestic and foreign employees. In order to protect legitimate expectations, a collective agreement in existence as per a cut-off date is given priority for the duration of its existence over the stipulated minimum remuneration. Priority is also given to an ensuing collective agreement by which the parties to the collective agreement replace or substitute their collective agreement existing at the cut-off date.