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Employer pays less than minimum wage: What you can do now

Expert article in labor law

Employer pays below the minimum wage: What options do you have?

From January 1, 2026, the statutory minimum wage will be €13.90 gross per hour. Nevertheless, customs authorities initiated over 7,200 investigations in 2023 for minimum wage violations. The actual number of violations is likely to be far higher. Employees who suspect they are receiving less than the legally mandated minimum wage have clear rights and can utilize various options to claim back pay. The following article describes in detail how to proceed.

Detect minimum wage violations: How to check your hourly wage

The first step is always a mathematical check. Divide your monthly gross salary by the total number of hours actually worked in that month. If the resulting figure is below €13.90, this specifically indicates a violation of the minimum wage.

The crucial question here is which times count as working time. According to case law, all compensable time periods must be recognized: company-mandated changing times, travel distances within the company premises, mandatory handovers, preparatory and follow-up activities, and on-call duty during which work must be available at any time. If such times are disregarded during recording, the actual hourly wage quickly falls below the legally prescribed minimum.

Regarding the consideration of wage components, the following must be noted: Only payments made directly in return for the work performed may be credited. Supplements for night work, Sundays and public holidays, hardship allowances, and tips are exempt from the minimum wage. Likewise, deductions—for example, for work clothes, equipment, meals, or accommodation—that would reduce the remaining hourly wage below €13.90 are not permitted.

Lump-sum payments are particularly problematic. If an employee receives a fixed monthly salary without a defined maximum working time, the calculated hourly wage often falls below the minimum wage in months with a high workload. In sectors with generally binding collective agreements, such as construction, nursing, or building cleaning, higher industry-specific minimum wages sometimes apply, and failure to comply with these also constitutes an administrative offense.

As soon as a suspicion arises, it is advisable to document the calculation and have it reviewed by an employment lawyer. Particularly in cases of flat-rate pay or fluctuating workload, the exact amount of the claim can rarely be determined easily.

Collect evidence: working time records, payslips, correspondence

The success of a minimum wage claim depends significantly on the quality of the evidence. In proceedings before the labor court, the burden of proof initially lies with the employee to present and substantiate the actual hours worked. Complete and precise documentation is therefore often crucial for a successful claim.

The following are considered key pieces of evidence:

Own records of working hours with precise start and end times and documented breaks for each workday.
Pay slips and employment contracts including all attachments, supplementary agreements and employer-provided time sheets
Duty rosters, shift schedules, company deployment lists, calendar notes, and access or time cards
Electronic correspondence such as emails, chat messages and SMS that document working hours or company instructions
Colleagues as witnesses who can confirm the actual scope of work and the company's remuneration practices

Of particular importance is the statutory record-keeping obligation pursuant to Section 17 of the Minimum Wage Act (MiLoG): In certain sectors such as the catering industry, construction, freight forwarding, building cleaning, and the meat industry, employers are required to record the start, end, and duration of daily working hours and to retain these records for at least two years. This obligation applies without exception to marginal employment. If an employer fails to comply with this obligation, this will regularly work in favor of the employee in subsequent legal proceedings.

It is advisable to keep your own timesheet in parallel – whether handwritten, using a digital application, or in a spreadsheet – and to immediately report any discrepancies in your payroll to your employer in writing. Such timely records carry considerably more weight in court than information reconstructed later.

Have the collected documents reviewed by a lawyer at an early stage, because expert knowledge can quickly identify which evidence forms the strongest foundation and where gaps should be filled by supplementary documents or witness statements.

First step: Claim the minimum wage in writing from your employer.

Before taking legal action, it is advisable to assert your claim for the wage difference in writing to your employer. This underscores the seriousness of your claim, documents the date of its assertion, and forms the basis for future claims – for example, regarding default interest or contractual limitation periods.

The letter must precisely specify the period in question, the calculated difference, and a reasonable payment deadline – generally two to four weeks. It is important to note that claims for the statutory minimum wage are not subject to contractual limitation periods. Provisions that restrict the minimum wage are invalid according to Section 3 of the Minimum Wage Act (MiLoG). Clauses that do not explicitly exclude the minimum wage may even be entirely void (Federal Labor Court, judgment of September 18, 2018, 9 AZR 162/18). However, claims for other wage components are subject to time limits – in these cases, prompt action can be crucial.

Minimum wage claims are subject to the regular three-year limitation period (§ 195 German Civil Code), which begins at the end of the year in which the claim arose (§ 199 para. 1 German Civil Code). A claim from 2024 will therefore not expire until December 31, 2027 – ample time for legal action, but too valuable to be left unused.

The receipt of your letter should be verifiably documented. Sending it by registered mail with return receipt is recommended; a simple email or WhatsApp message may suffice, but is often more difficult to prove in the event of a dispute. If the employer does not respond within the given deadline or issues a rejection, you have the right to take legal action in labor court.

Have the demand letter drafted or at least reviewed by a lawyer, because precise wording with reference to the relevant legal bases, a correct calculation and appropriate time pressure significantly increase the prospect of an out-of-court settlement.

Wage claim at the labor court: procedures, deadlines and protection against dismissal

If the employer fails to respond or refuses to pay, the minimum wage claim can be enforced in labor court. The labor court with jurisdiction is generally the one at the company's registered office or the usual place of employment. While the law does not mandate legal representation for the first instance (§ 11 para. 1 ArbGG), expert legal representation is strongly recommended, as the wording of the claim, the calculation of the amount owed, and the presentation of evidence are crucial to the outcome.

A unique feature of labor court proceedings concerns the allocation of costs: In the first instance, each party bears its own legal fees – even the winning party. Legal expenses insurance with a labor law component typically covers these costs. Court fees are calculated based on the amount in dispute and are only incurred if the proceedings progress to a judgment; they are waived in the case of a settlement – the usual outcome in wage disputes.

The legal process begins with a conciliation hearing, in which the court seeks an amicable settlement. If no agreement is reached at this stage, a full hearing follows, during which evidence is presented. Wage disputes are often settled amicably during the conciliation hearing – employers usually have a strong interest in avoiding a publicly recorded conviction for minimum wage violations.

A significant risk from an employee's perspective is the fear of dismissal. This fear lacks legal basis: Dismissal solely for claiming the minimum wage is considered retaliation under Section 612a of the German Civil Code (BGB) and can be successfully challenged in labor court. Dismissals issued under duress or hidden reprisals are also legally actionable; swift action is crucial, as a claim for protection against unfair dismissal must be filed within three weeks of receiving the dismissal notice (Section 4 of the German Protection Against Unfair Dismissal Act (KSchG)).

Prepare your lawsuit in good time, because a precise calculation of your claim, a clear demand letter and (if necessary) an accompanying unfair dismissal claim significantly increase your chances of success and increase the pressure to negotiate at the conciliation hearing.

Report minimum wage violations to customs: Financial Control Unit for Undeclared Work and BMAS Hotline

In addition to filing a lawsuit with the labor court, you can also report a minimum wage violation to the authorities. The Financial Control Unit for Undeclared Work (FKS) of the Customs Service, which is organizationally part of the main customs offices, is responsible for prosecuting violations of the Minimum Wage Act. Reports can be submitted in writing, by telephone, or via the Customs Service's online form – even anonymously, although the personal data of the whistleblower is subject to data protection regulations.

The potential sanctions are drastic: According to Section 21 of the Minimum Wage Act (MiLoG), intentional or negligent violations of the minimum wage obligation can result in fines of up to €500,000. Violations of the record-keeping obligation under Section 17 of the MiLoG can be punished with fines of up to €30,000. If a fine exceeds €2,500, exclusion from public tenders follows. In cases of particularly serious violations, the criminal offense of withholding and misappropriating wages under Section 266a of the German Criminal Code (StGB) may also apply, which carries a penalty of imprisonment for up to five years or a fine.

For initial guidance, the Federal Ministry of Labour and Social Affairs (BMAS) minimum wage hotline is available at 030 60280028 (Monday to Thursday 8 a.m. to 5 p.m., Friday 8 a.m. to 12 p.m.). The hotline does not offer individual legal advice but provides support with basic questions. It forwards specific reports of violations to the responsible customs office.

The crucial point is this: A report to the Financial Control Unit (FKS) does not replace the independent civil enforcement of your wage claim. The fine proceedings do not automatically lead to a back payment to you as an employee. However, both paths can reinforce each other, as an ongoing or threatened customs audit often prompts the employer to make an out-of-court settlement.

Before reporting to the FKS, clarify which approach is strategically sensible, as it is often more advantageous to first secure the civil claim and use the official report as an additional means of exerting pressure.

When is legal advice advisable in cases of minimum wage violations?

Legal advice is recommended as soon as a financial review confirms a well-founded suspicion or the employer fails to respond to a written payment request. Claims for the minimum wage are mandatory and can be pursued retroactively for up to three years. However, in cases of continuous underpayment, the back payments can quickly amount to four- or five-figure sums. At the same time, the legal framework is complex: limitation periods, the crediting of bonuses, the obligation to provide proof of working hours, and dealing with counterclaims regularly lead to disputes in practice.

A lawyer specializing in employment law determines the exact demands, checks the legal validity of contractual provisions, determines the optimal sequence between out-of-court enforcement, wage claim and FKS notification, and takes over the representation in the conciliation hearing as well as in a possible simultaneously required unfair dismissal claim.

Legal assistance is particularly recommended in cases involving a fixed monthly salary, lack of time tracking, bogus self-employment, or an impending status review by the German Pension Insurance. In these cases, proving one's case is complex, but the impact on back pay and social security contributions is typically substantial.

Have your case legally assessed promptly, because those who enter into the dispute with precise calculation of claims, secure evidence and a well-thought-out legal approach achieve a significant additional payment in the vast majority of cases, without unnecessarily jeopardizing the existing employment relationship.

Conclusion: From suspicion to additional payment

Since January 1, 2026, every employee in Germany has a legal right to the statutory minimum wage of €13.90 gross per hour. If the wage falls below this amount, several options are available: a written demand, legal action at the labor court, and reporting to the Financial Control Unit for Undeclared Work. Minimum wage claims are subject to a three-year statute of limitations, cannot be limited by exclusion clauses, and are protected against dismissal as a retaliatory measure according to Section 612a of the German Civil Code (BGB).

For a successful claim, a precise determination of the actual hours worked, complete documentation of evidence, and a legally sound and demonstrably delivered demand letter are crucial. If there is suspicion of underpayment of the statutory minimum wage, prompt action is recommended, and consulting a lawyer is advisable before initiating legal proceedings.

Have your payslips and time sheets reviewed by a legal professional immediately to establish any minimum wage violations beyond doubt, to effectively assert claims for back pay, and to successfully enforce your rights against your employer.