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Read aloud:
1 October 2026
Federal Labor Court ruling: Employers may not exclude minimum wage earners from voluntary additional special payments such as an inflation compensation bonus due to a statutory minimum wage increase.
An employer may not exclude employees from a voluntary inflation bonus simply because their wages have recently increased due to the statutory minimum wage hike . This is not a valid justification and violates the principle of equal treatment under labor law – as ruled by the Federal Labor Court (BAG) . Employers must therefore ensure that voluntary special payments are distributed fairly and in accordance with the principle of equal treatment.
In this specific case, the employer granted full-time employees an "inflation allowance" of €115,38 net for the following 26 months, starting in November 2022, totaling just under €3.000. This allowance was based on the option introduced by law to grant employees a tax- and social security contribution-free payment of up to €3.000 until December 2024. Part-time employees received a pro-rata amount.
Employees who, like the plaintiff, earned less than €11,49 per hour or more than €4.000,00 gross on the cut-off date of September 30, 2022, received only a one-time payment of €250. The works council informally agreed to these distribution principles.
The employee argued that this practice violated the principle of equal treatment under labor law . His employer, in turn, maintained that employees who had more money available due to the increase in the statutory minimum wage were less in need of compensation than employees who did not benefit from the increase or only benefited slightly. Given their already low standard of living, they were also less affected by inflation. This justified their exclusion from the monthly inflation allowance. The employee had initially received the statutory minimum wage of €10,56 per hour and, after the increase on October 1, 2022, €12,00 gross.
Operations management
Operations management
Operations management
➡️ The competent labor court and the Saxony State Labor Court dismissed the claim seeking payment of the full inflation allowance (less the granted 250 euros). The plaintiff's appeal to the Tenth Senate of the Federal Labor Court was successful.
"If an employer grants voluntary benefits based on its own generalized distribution decision, it must define the eligibility requirements in such a way that employees are not excluded for extraneous or arbitrary reasons. If it forms groups of favored and disadvantaged employees, the reasons for the differentiation must be based on reasonable, plausible considerations and must not violate higher-ranking value judgments, according to the purpose of the benefit," the court stated.
Such reasons do not exist in this specific case. Rather, the exclusion of employees whose remuneration has increased due to a rise in the statutory minimum wage from a voluntary special payment violates the value judgments of the legislator of the Minimum Wage Act, according to which, among other things, a minimum protection should be guaranteed through appropriate minimum working conditions and participation in social life should be enabled.
This applies in particular if the voluntary special payment is paid as an inflation adjustment bonus within the meaning of Section 3 No. 11c of the German Income Tax Act (EStG), which, according to the legislator's intent, was to be paid in addition to the remuneration already owed. For minimum wage earners, the remuneration already owed is the statutory minimum wage.
Federal Labour Court, Judgment of 30 September 2026, 10 AZR/62/26
Source: Press Office of the Federal Labour Court
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