New national minimum wages for care workers

On 1 August 2010, new national minimum wages for care workers came into force in Germany. The employees covered will be entitled to an hourly minimum wage of €8.50 in western Germany, including Berlin, and €7.50 in eastern Germany. The minimum wages, declared binding under the Posted Workers Act, will affect between 520,000 and 560,000 caregivers out of a total of 810,000 care workers and will apply to all employees regardless of the country of origin of their employer.

On 1 August 2010, new national minimum wages for care workers came into force setting a minimum hourly wage of €8.50 in western Germany, including Berlin, and €7.50 in eastern Germany. These rates will increase with effect from 1 January 2012 to €8.75 in western Germany and €7.75 in eastern Germany. With effect from 1 January 2013, rates will rise to €9.00 and €8.00 respectively. These national minimum wages were declared binding under the Posted Workers Act (Arbeitnehmer-Entsendegesetz, AEntG) by decree of the Federal Ministry of Labour (BMAS). This means that they apply to all employees in Germany working in the relevant occupations regardless of the country of origin of their employer and that they also cover temporary agency workers hired out to employers in the care sector. Between 520,000 and 560,000 care workers in ambulatory and stationary ‘basic care’ roles (Grundpflege) are covered by the decree which will expire on 31 December 2014.

The minimum wages apply to care facilities and care providers that provide services under the provisions of Social Security Code XI (Sozialgesetzbuch XI, SGB XI). This act regulates the compulsory long-term care insurance scheme (Pflegeversicherung) which is one pillar of the German social security system. SGB XI defines as ‘basic care’ those services directed at supporting patients by helping them with personal care, feeding and mobility. Not covered by the minimum wages are hospitals and care providers offering predominantly health care nursing services, or caregivers directly employed by private households.

Background

In February 2009, the German parliament (Bundestag) agreed to include the care sector in the Posted Workers Act to make it possible for minimum wages to be set in this sector. The Posted Workers Act stipulates that minimum wages can only be declared binding by BMAS when agreed independently by the bargaining parties through collective wage agreements. However, in the case of care services provided under SGB XI, the negotiation of a national collective agreement covering all employers was not feasible. Churches, important providers of care alongside public and private employers, do not usually enter into collective agreements. To address this anomaly, the AEntG was amended to allow the establishment of a so-called Care Commission (Pflegekommission) composed of trade union representatives and public, private and church employers, which could then discuss a national minimum wage. Church representatives were assured that any outcome would require their agreement. The commission finally reached a consensus in March 2010, thus paving the way for the ministerial decree.

The gender aspect

Data from the Institute for Economic and Social Research (WSI) (DE0404205F) demonstrate that low pay is found particularly in those sectors that predominantly employ women. Care work is no exception. According to data from 2007 provided by the Ministry of Labour of North-Rhine Westphalia, more than four in five workers in the various care professions are women. The United Services Union (ver.di) estimates that 72% of all employees in care work earn poor wages, which entitles them to welfare top-up payments under the Hartz IV scheme (DE0401205F).

Reactions

The new minimum wages were broadly welcomed. The Minister of Labour, Ursula von der Leyen, from the Christian Democratic Union (CDU), pointed out the importance of the new minimum wages in the context of the free movement of workers within the EU which will be allowed from 1 May 2011. The employers’ association (Arbeitgeberverband Pflege), representing private employers in the sector, also welcomed the new minimum wages. Its President, Thomas Greiner, stated in a press release that they would help to maintain employment and were a signal that care work would remain affordable. The representative of ver.di in the Care Commission, Ellen Paschke, said the new minimum wage was a welcome first step and a necessary safety net to prevent wage dumping. However, she deplored the fact that it had not been possible to reach a consensus on a uniform rate for the whole of Germany.

Heiner Dribbusch, Institute of Economic and Social Research (WSI)

 

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