BArbG: Bonuses can be credited to the wage

BArbG, resolution from May 25, 2016 - 5 AZR 135/16 -

The Federal Labor Court (Bundesarbeitsgericht) ruled that in case of a fixed gross monthly remuneration, where an employee is committed to work a certain number of hours every week, regular unconditional and irrevocable bonuses, made in monthly installments of 1/12 of the whole bonus, can be credited to the wage.

In the concrete case, the works council had approved such a regulation. The employee filed a suit against this scheme. She claimed it was in breach of her claim on the statutory minimum wage. The courts did not follow this opinion. For one, the works council had agreed to this regulation, acting within its legitimate scope of power. Secondly this regulation does not undermine the respective legislation. The employer is entitled to include payments into the calculation for the monthly salary (see p. 67 of the explanatory memorandum, Bundestag publication 18/1556). These payment must be meant as compensation for the normal work by the employee and be paid without reserve.

The Federal Labor Court has now decided that such unconditionally and irrevocably paid annual bonuses, made in installments of 1/12 of the bonus, in each calendar month, must be taken into account and can be included in the calculation of the real monthly salary.

vpmk attorneys can help you implement this decision. We recommend the implementation of a monthly installment of the bonus instead of paying a single annual bonus. That way the special payment may be calculated into the monthly salary. Please be aware that the works council might have to agree to such a regulation.

It should be noted: overtime, additional payments for night, Sunday and holiday work, compensation for particularly arduous working conditions, as well as performance related bonuses are not allowed to be calculated into the average salary.

We are happy to advise you during an initial consultation and will gladly put together a concrete proposal for you. Contact us via E-Mail:

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