Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

Strengthening of Company Pension

New Legislation Enacted

Author: Corinna Verhoek, Partner — vangard, Littler Global Germany

Only around 60% of employees in Germany have a company pension plan, which they use to provide for retirement in addition to the statutory pension. This is set to change from January 1, 2018. The Company Pensions Strengthening Act aims to raise the level of pension provision in Germany, and provides two key points: (i) the framework conditions for occupational pension provision will be improved, including existing company pensions; and (ii) the collective bargaining partner model ("Nahles pension") will be introduced. To achieve a higher level of pension provision, the collective bargaining partners (employers' associations and trade unions) are to design adequate occupational pension schemes by means of collective bargaining agreements, thus creating a higher level of acceptance among employees.

Statutory Minimum Wage: Equal Amount, Without Exception

Upcoming Deadline for Legal Compliance

Author: Corinna Verhoek, Partner — vangard, Littler Global Germany

In Germany, the statutory minimum wage has been set to EUR 8.84 per hour in 2018. This time, it has been made mandatory and applicable to all sectors, without exception. Collective bargaining agreements providing for remuneration below the statutory minimum wage will be ineffective from 2018. The minimum wage may be adjusted again in 2019. The so-called “Minimum Wage Commission” will discuss this in 2018 and submit a proposal to the Federal Government on the level of the statutory minimum wage. The Federal Government will then determine the minimum wage applicable from 2019 by decree.

Increasing Social Security Contributions

Upcoming Deadline for Legal Compliance

Author: Corinna Verhoek, Partner — vangard, Littler Global Germany

In 2018, companies should prepare for rising social security contributions, as the income thresholds for social security contributions have been increased. From 2018, the following figures will apply: (i) health and nursing care insurance: 4,425 EUR per month (53,100 EUR per year); (ii) pension and unemployment Insurance/West: 6,500 EUR per month (78,000 EUR per year); (iii) pension and unemployment insurance/East: 5,800 EUR per month (69,600 EUR per year); and (iv) for companies that employ employees with remuneration above the income thresholds, this can lead to additional annual costs of up to 300 EUR per employee. At the turn of the year, the contribution rate in general pension insurance will fall by 0.1% to a total of 18.6%. This means that the pension insurance contribution for companies will be 9.3% from 2018 onwards.