Minimum wage violations cost Germany 64 billion euros, study finds

Millions of German workers earning the minimum wage may have been cheated out of billions of euros since the wage floor was introduced in 2015. A study by the German Trade Union Confederation (DGB) estimates that violations of the minimum wage have cost employees and the state a staggering 64 billion euros.

“

A part of the financing gaps is due to criminal actions by employers who do not comply with their legal obligations.

The DGB's calculations, seen by the dpa news agency, indicate that workers themselves bore the brunt, losing approximately 35 billion euros through underpayment. Social security funds are estimated to have missed out on 22 billion euros, while tax authorities lost an additional 7 billion euros in income tax revenue.

The study relies on data from the Socio-Economic Panel, an annual survey of about 30,000 people. DGB experts analyzed reported working hours and earnings to determine how many individuals received less than the legally mandated minimum wage, which currently stands at 13.90 euros per hour. The average shortfall per hour, according to the calculations, ranged from 1.70 to 2.40 euros.

“

Minimum wage fraud is not a minor offense – it must be rigorously pursued and severely punished.

While the Confederation of German Employers' Associations (BDA) expressed reservations about the calculation's basis, stating that survey data can be imprecise, they also acknowledged that "violations are not acceptable and must be consistently checked and prosecuted." The DGB, however, is calling for a tougher stance against what it terms "wage theft." Stefan Körzell, the deputy head of the DGB, criticized employers who fail to meet their legal obligations, stating that "minimum wage fraud is not a minor offense – it must be rigorously pursued and severely punished."

“

Violations are not acceptable and must be consistently checked and prosecuted. Care must be taken when evaluating the numbers. Survey data can be imprecise, for example, if working hours are not recorded accurately.