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Minimum wage effects on internships
Since January 2015, Germany has a minimum wage of currently 8.50 Euros her work hour. In a previous post, we already talked about the effects of that law on the labor market in general. However, internships can also be affected by the minimum wage, depending on the circumstances. In this post, we will talk about some of the special cases.
1) Internships with a duration of less than three months
The minimum wage only applies to internships that last for more than three month. That exception was put into the law to account for the fact that interns usually don’t contribute to the company’s business success right away. The initial training phase tends to cost the company, and the minimum wake could raise the cost for short-term internships in a way that would deter companies from offering them.
For any internship that is intended to last for more than three months, the minimum wage is required from day one.
2) Compulsory internships
Some kinds of schools and universities require internships over the course of studies. Examples for this are universities of applied sciences and technical schools. For those internships, the students are not entitles to the minimum wage. The same rule applies to internships that are part of the preparation for vocational training or introductory qualification at a company, especially for qualification measures in pre-vocational training under the Vocational Training Act.
Exceptions are career orientation internships and internships accompanying studies that last longer than three months. For those, the minimum wage is again required from day one.
3) Underage interns
The minimum wage only applies to adults. This is to not take away young people’s motivation to get a proper vocational training, which might be the case should the minimum wage allow them to generate a higher income through internships than during their training period.
The system for vocational training in Germany should not be circumvented, the young people need a long-term perspective in the labor market.
4) Other exceptions
For some industries, and sometimes only locally, transitional periods were put in. For long-term unemployed people receiving social security under “Hartz IV” (ALG II), the minimum wage only becomes mandatory after they have been in some kind of employment for six months. This is meant to encourage companies to give these people a chance of making it back into the work force. There are no other exceptions.
Overall, interns as well as regular employees should make sure that their hourly salary is put into their contract to avoid misunderstandings upon end of the contract or during disagreements.
What this means for internships
After roughly one year it’s still difficult to identify long-term effects that the minimum wage law had on the variety and quality of offered internships in Germany. Most likely, small companies will slightly reduce their offers, while large companies will keep or even expand their activities in talent scouting. It is also unlikely that we will see mainly short-term internships in the future.
Those looking for a compulsory internship might actually have a new advantage over other candidates, as they do not require minimum wage.
Herr Daniel Stock d.stock(@)top-jobs-europe.de