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Germany — Coalition split over minimum salary

07 July 2010

Angela Merkel's coalition government has so far not been able to agree on introducing a minimum salary for temporary employees, German daily Rheinische Post reports.

The Federal Minister for Labour and Social Affairs, Ursula von der Leyen (Conservative) and the Federal Minister for Economics and Technology, Rainer Brüderle (Free Democrat) have fundamentally different views on the introduction of a minimum salary for temporary employees.

Germany does not have a minimum salary as such. Minimum salaries are negotiated sector by sector via collective bargaining between employers and unions. Temporary employment is regarded as its own sector and is represented by three different employer organisations (BZA, iGZ, AMP) who have signed different minimum salary agreements with unions.

In view of the labour market opening for staffing agencies from Eastern member states of the European Union in May 2011, pressure is now rising on all three temporary employer organisations to come up with one minimum salary for all, albeit still different for temporary employees in Eastern Germany where salary levels and cost of living levels are lower than in the West of the country.

Von der Leyen wants to make a new minimum salary level legally binding for the whole industry but only if it is agreed first by the three employer organisations and the unions. Otherwise, temporary staffing agencies which are not part of the collective bargaining process can pay their temporary employees whatever they can get away with. The industry is talking about 3 Euro to 4 Euro per hour, which would be feasible for an agency with a Polish or Czech cost base.

However, Brüderle is fundamentally opposed to a minimum salary set by the government. He believes in the open market and thinks that the industry should sort itself out.

Brüderle said "it is generally a mistake for governments to set minimum salary levels. Minimum salary arrangements in the [temporary employment] sector are perfectly adequate. The government must not interfere."

A meeting between von der Leyen and Brüderle on Monday ended with no agreement on the subject. Originally the coalition government had planned to come up with a solution on the matter before the Summer holidays.



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