Employers must pay wages on time - otherwise there are consequences. But when is pay due and what consequences does late payment have for the employer? An overview of the due date for payment of wages.
The due date for payment of wages is regulated in the German Civil Code (BGB): The employee is initially obliged to perform in advance. This means that he must first work. This is followed by remuneration for his work.
If the remuneration is calculated according to time periods, it must be paid after the individual time periods have elapsed. Thus, if it is agreed by months, the employer must pay the salary after the end of the month. In principle, the salary is thus due on the first day of the following month (§ 614 BGB).
In principle, it is possible to deviate from this regulation. For this reason, other regulations on due dates are often found in employment contracts, collective bargaining agreements or works agreements: for example, agreements on written settlement and monthly cashless payments at the end of the month or by the 15th of the following month are common. Such arrangements with a later due date for salary payments are normally not legally objectionable. Important: Pursuant to Section 87 (1) No. 4 BetrVG, the works council has a right of co-determination with regard to the time, place and manner of payment of remuneration.
Do not defer salary payment beyond the following month
The Minimum Wage Act (MiLoG) prescribes a maximum period for the payment of wages and thus sets limits to individual contractual agreements: Pursuant to Section 2 MiLoG, the employer must pay the minimum wage no later than the last banking day of the month following the month in which the work was performed. The legislator has made exceptions to this due date rule for working time accounts.
Employers should nevertheless not pay the salary later than the 15th of the following month. Because in the view of the courts, the limit of reasonableness for employees is reached beyond this point: the LAG Baden-Württemberg ruled that a clause stipulating that salary payments are due on the 20th of the following month is invalid (ruling dated October 9, 2017, Case No. 4 Sa 8/17).
The court explained: A deviation from Section 614 BGB is only possible if it is justified by interests of the employer that are worthy of protection. This is the case if the employer has to recalculate the remuneration components on a monthly basis. Postponing the due date of the salary until the 15th of the following month was reasonable - at least if the employee had previously been paid at least a discount. However, the employer exceeded this reasonableness threshold in the negotiated case.
Special case of training allowance
An exception applies to training remuneration: It must be paid at the latest on the last working day of the month in which the work was performed (§ 18 BBiG).
Legal consequences of late payment of wagesFor a long time, it was controversial whether employers had to pay 40 euros in lump-sum damages in the event of a late payment of wages. In 2018, the Federal Labor Court (Bundesarbeitsgericht, BAG) came out against a lump-sum compensation for employers in the event of late payment of wages in a landmark ruling (BAG ruling dated September 25, 2018, ref. 8 AZR 26/18).
Irrespective of this, there are legal consequences if the employer pays the salary into the employee's account too late or not in full. This is because he is then in default even without a reminder (Section 286 (2) No. 1 BGB). The default begins on the following day.
The legal consequences may be
- that the employer must compensate the employee for damages incurred by the employee
- the employer is obliged to pay interest on arrears,
- the employee may be entitled to extraordinary termination.