BSG: A company car does not replace a minimum wage

The Federal Social Court has clarified: A company car does not replace the minimum wage. Employers must pay the minimum wage in cash – and also pay additional social security contributions on it.

This article is part of the special topic The most important facts about the minimum wage

The Federal Social Court (BSG) The court clarified that the provision of a company car may not be credited towards the statutory minimum wage. Employers must therefore pay social security contributions on the minimum wage – in addition to the contributions already paid for the company car (Case Nos. B 12 BA 8/24 R and B 12 BA 6/23 R).

In two decided cases, part-time employees received exclusively a company car as remunerationThe employers paid social security contributions, but did not pay the minimum wage. Following company audits, the German Federal Pension Insurance Further contributions to the statutory minimum wage are not permitted, as the statutory minimum wage entitlement is (still) not fulfilled by the provision of a company car. The Federal Social Court has confirmed this.

If employees have received more through the use of the company car than contractually agreed, the court considers this a matter between employer and employee, but it has no bearing on the obligation to pay social security contributions.

Source: Federal Social Court

DHB now also digital!Simply click here and register for the digital German Crafts Journal (DHB)!