New laws
Higher minimum wage & higher minijob threshold
Since January 1st, 2026, the statutory minimum wage according to the German Minimum Wage Act is 13.90 EUR gross per hour. At the same time, the threshold for minijobs was increased to 603 EUR per month.
You can already set the calendar for the next increase: From 2027 on, the hourly minimum wage will be 14.60 EUR gross.
Transparency in Wage Structures Act
The EU’s Transparency in Wage Structures Act should be implemented in national law until June 7th, 2026. But so far Germany has not come up with a corresponding draft of a new law.
The Act requires employers to notify applicants until the first interview and employees upon demand about the salary range for his specific position. If his salary diverts more than slightly from the comparison group’s, a remedial procedure must be initiated. Companies with more than 100 employees have additional reporting obligations.
New court decisions
Court denies bonus "at company’s discretion"
The Labour High Court of Hessen has recently (file no. 14 SLa 681/24) ruled against a bonus clause that allowed the employer to set the bonus at its own discretion. This one-sided right violates the employee unjustifiedly in his rights since it diverts from the legal standard of "equitable discretion" under § 315 para. 1 BGB by not allowing a review of the decision by court.
Since it found the clause invalid, the court underwent that review of the reasons and the weighing of the conflicting interests. If the employer has not documented the reasons for the decision (e.g. because he did not know he had to), this goes to his detriment. The same applies for milestones that have been agreed to, but that were impossible to be reached, e.g. due to the economic situation. Caps can legally limit the discretion however. At the same time, they may trigger expectations of the employee.
You can read more about commission agreements in this blog post.
Garden leave clause
The Federal Labour Court has confirmed the lower instance, the Labour High Court of Niedersachsen (see our previous article about employment agreement changes in 2025), about an invalid garden leave clause. The court found that a cross-the-board right to stipulate garden leave is invalid. This may surprise since the employee on garden leave gets paid without having to do any work. However, the employee has a constitutional right to actually exercise his occupation according to Art. 2 para. 1, 12 para. 1 of the German Constitution. Only if the employer’s rights outweigh the employees, may he stipulate garden leave. In a cross-the-board clause such a weighing of conflicting interests is however not possible.
How to decide on garden leave instead?
According to the Federal Labour Court you don’t even need a garden leave clause in the employment contract. The employer just needs to weigh his interests with the employee’s in the concrete case. To do so, he should document his reasons and decision in case the decision will be challenged in court.
Employees from third countries
New notification obligation since January 1st, 2026
From January 1st, 2026 on, employees must inform their third country employees at latest on their first day of work in text form about the helpdesk "Faire Integration" (fair integration). Violations of the obligation can be fined.
Work requires a valid work permit
Employees from third countries are only allowed to work with a valid work permit. Employers are permitted to check the validity of the word permit and inform the immigration authority once the employment ends. For proof you should keep a copy of the permit.
Employment agreements should contain a suspensive condition and a condition subsequent that the agreement is only valid if and to the extent that the employee can submit a valid work permit.
Term for Ukrainian refugees extended
Ukrainian refugees benefit from a special regulation that grants them an automatic work permit according to § 24 of the Act on the Residence (Aufenthaltsgesetz). The original term would have ended on March 4th, 2026, but was extended for another year. Acknowledged refugees from Ukraine are now allowed to work in Germany until March 4th, 2027.
Published on 05.05.2026