Germany is currently facing a major shortage of skilled construction workers. In addition, demand for new construction and the rollout of fiber optic networks is incredibly high. This presents opportunities for Dutch businesses.
Unfortunately, if you start working in Germany, you can't simply cross the border with your staff. You'll need to arrange a few things first, including complying with general regulations and construction-specific regulations. We'll tell you more about this in a series of blog posts, starting with the statutory minimum wage.
Like the Netherlands, Germany also has a statutory minimum wage. This wage is set out in the Minimum Wage Act (Mindestlohngesetz). The minimum wage is legally prescribed for every employee working in Germany, including foreign employees working temporarily in Germany.
Currently, the general statutory minimum wage in Germany is €12.41 gross per hour. From January 1, 2025, this will increase to €12.82 gross per hour.
In addition to the general statutory minimum wage, Germany has a higher minimum wage for various sectors. This minimum wage is set out in a collective bargaining agreement. If this minimum wage is higher than the general minimum wage (which is almost always the case), you are obligated to pay this sector-specific minimum wage.
In the German construction industry, there's a sector-specific minimum wage for painters, roofers, electrical installers, and scaffolders, among others. There's also a more general collective labor agreement (CLA) for construction (Baugewerbe). Note: your employees will fall under this CLA sooner than you think. In Germany, the nature of the work is decisive, not the applicable Dutch CLA. So, make sure you're well-informed about this beforehand.
When determining the sector-specific minimum wage in Germany, you must also consider the various pay groups. The pay group an individual employee falls into depends on their knowledge, qualifications, and experience.
In Germany, minimum wage legislation is generally strictly enforced. If an inspection occurs, you, as an employer, are expected to actively cooperate. For example, you must be able to provide certain documents (in German!). These include the employment contract, a recent payslip, proof of wage payment, and a timesheet.
If you don't comply with the regulations, the fine can be up to €500,000. Work may also be temporarily halted, you as a director may be held liable, and you may be temporarily excluded from tenders.
From April 1, 2025, and April 1, 2026, you must expect wage increases of 4.2 to 5% (depending on the region where you operate) and a minimum of 3.9%, respectively.
Besides the industry-specific minimum wage regulations, there are other rules in Germany if you employ Dutch workers in construction. For example, you must be aware of the obligation to pay contributions from SOKA BAU, the German holiday fund for construction workers. We'll discuss this in more detail in a future article.
You also need to consider several rules that apply to every Dutch employer doing business across the border. You can read more about this in this article:
Cross-border work in Germany: 5 points of attention for employers
Are you planning to work in Germany with your Dutch construction staff? Then it's important to get sound advice about your obligations beforehand. Heisterborg International is the right place for this. Our team of employment law and HR specialists is fully bilingual and well-versed in German employment law.
You can also choose to use Heisterborg International as your external HR department for your German operations. We'll take care of everything for you, allowing you to focus on what you do best: running your business.
Please feel free to inquire about what we can do for you.
