Germany: Obligation to pay full social security contributions for trainees

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Reduced rate of social security contributions for the lower paid does not apply to trainees.

Lower social security rates apply to the employer and employee in respect of low paid employees "Geringverdiener" (§ 8 SGB IV) and progress according to a sliding scale (§ 20 Abs. 2 SGB IV).

However, in a recent decision the Higher Social Court Baden-Württemberg decided that this provision did not apply to trainees and apprentices, even if their earnings would appear to qualify them from the lower rates. To the contrary, full social security contributions are due from both employer and trainee.

The court held that unconstitutional and unequal treatment does not result when trainees are compared with those employees benefitting from lower contribution rates.  The rationale was that trainees are not yet able provide an employer with a full service when compared to a qualified employee, as they are still learning an occupation and the pre-dominant element of the employment of a trainee is his continuing education.

Commentary

Odd though this decision may seem, it appears to have been decided to limit the state’s exposure to potential further discounted social security costs.  The public policy seems to be that those who are being trained do not contribute in the same way as “proper” employees and therefore should not be subsidised by the state.

Resources

Higher Social Court Baden-Württemberg: Decision dated 10 June 2009

For further information or to discuss the issues raised, please contact Joachim Menz (joachim.menz@keller-menz.de) on +49 89 24 22 30 0.

This article was produced by, and re-produced with kind permission of, our correspondent firm in Germany, Keller Menz Rechtsanwälte.  www.keller-menz.de

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