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Coronavirus: Daimler to restart German factories from April 20th

Mercedes-Benz maker Daimler said Wednesday it plans to restart work at factories in Germany from April 20th, after a weeks-long interruption due to the coronavirus pandemic.

Coronavirus: Daimler to restart German factories from April 20th
File photo shows a Daimler employee at the Mercedes-Benz plant in Stuttgart. Photo: DPA

“In a few selected factories, we are implementing a coordinated restart of production,” the group said in a statement.

“From April 20th this will affect the car motor factories in Germany, Mercedes-Benz car factories in Sindelfingen and Bremen and the vans factories.”

Truck and bus sites will also open from the same date.

Germany has ordered strict measures, including a ban on gatherings of more than two people in public, to stem the spread of the coronavirus pandemic.

Measures have been introduced since the beginning of March, but stricter controls came into force on March 22nd and are scheduled to be in place up to and including April 19th.

But Daimler also said that it would extend shorter hours (known in German as Kurzarbeit) for its workers in Germany until April 30th, impacting “the majority of production… as well as administration”.

In the first quarter, Daimler's worldwide sales slumped 15 percent year-on-year, with Mercedes-Benz cars alone seeing a 20-percent drop in China and 16 percent in Europe.

READ ALSO: Kurzarbeit: Germany bets on tried-and-tested tool for coronavirus jobs crisis

Coronavirus “heavily impacts sales on a global scale,” finance chief Harald Wilhelm said in a conference call Wednesday, adding “the overall economic impact cannot yet be assessed with sufficient certainty”.

Wilhelm nevertheless said that Daimler is well positioned to weather the blow.

Car sales falling fast

Meanwhile Volkswagen said Wednesday that it would begin increasing production from April 14th in “a few” factories building car components, which are currently operating at much reduced capacity.

Most of the auto behemoth's sites are closed until at least April 19th, but the group wants “to safeguard the supply of components to plants in China” after the Easter weekend.

READ ALSO: When and how will Germany's lockdown measures end?

“Further details of the mode of operation are expected after Easter” for other components and vehicles sites, VW said.

Daimler rival BMW said Tuesday that it would extend a production stop until April 30th, while Ford's European factories are on hold until at least May 4th.

Car sales plummeted in several European countries in March as far-reaching restrictions on daily life to limit the spread of the coronavirus bit.

Experts expect still-worse performance in April, while ratings agency Moody's forecast a 14-percent contraction in the global car market for 2020 as a whole.

But the picture is brightening in Asia, with “significant growth in demand” in China and South Korea, Mercedes-Benz sales director Britta Seeger said in a statement.

BMW also sees “first signs of a rebound” in China, sales chief Pieter Nota said Tuesday.

'Serious recession'

The coronavirus pandemic is heavily impacting business in Germany.

The German economy, which is Europe's biggest, is expected to shrink by nearly 10 percent in the second quarter, leading research institutes have warned, reported AFP.

“The corona pandemic will trigger a serious recession in Germany,” the six think tanks including Ifo, DIW and RWI said in their annual spring report.

The government has unveiled an eye-watering €1.1 trillion rescue package to cushion the blow for companies and employees, even suspending a constitutional balanced-budget rule to ramp up its response.

The package includes state guarantees for loans to businesses, easier access to benefits for workers placed on reduced hours, and direct support for the hardest-hit firms.

But even with the unprecedented measures, the six institutes warned that the recession “would leave its mark” on the job market.

Germany has long enjoyed record-low unemployment of around five percent, and German workers with their relatively high wages have for years been a key driver of the country's growth via domestic consumption.

Unemployment could climb to 5.9 percent report this year, the institutes said.

The number of workers on shorter hours meanwhile is expected to hit 2.4 million, as giants like Lufthansa, Volkswagen, BMW and Puma join a slew of companies taking up a government scheme that tops up the pay of affected employees.

Looking ahead, the institutes said Germany with its bulging state coffers was “well positioned” to cope with the economic slump and should bounce back in “the medium term”.

For 2021, the institutes expect Germany to notch up growth of 5.8 percent.

The German government will unveil its official projections for the economy on April 29th.

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WORKING IN GERMANY

Five things to know about salaries in Germany

Finding a job is typically a top priority when planning a move to Germany. The country boasts the third largest economy in the world and a continuing need for skilled professionals. 

Five things to know about salaries in Germany

If you are moving to Germany, you might soon start looking for a job in the country. However, like many other aspects of living abroad, there are several cultural differences and specificities when it comes to job hunting in Germany – especially when it comes to salaries.

Here are five things to know about salaries in Germany.

There is a minimum wage in Germany

Germany’s minimum wage of €12.41 per hour, pre-tax came into effect at the start of this year. This amounts to a monthly salary of €2,054 which ranks ninth in the world. The minimum wage will rise again in 2025 to €12.82 per hour before tax deductions.

There have been calls recently to hike the salary up higher to €14 per hour.

READ ALSO: Millions of workers in Germany ‘earning less than €14 per hour’

Find out salary expectations

Germany does not require companies to list salary ranges for listed positions. But that may be changing soon. The EU parliament passed a wage transparency law to require companies to publish annual reports detailing wage and wage discrepancy information. The rules, which are set to go into effect in 2027, are intended to help close the gender pay gap. 

In the meantime, employees can utilise online resources to find industry averages and expectations for different roles:

  • Gehalt.de offers users access to salary information on more than 800 professions
  • Online platform, Kununu provides compensation information and employer reviews to users in the DACH region  
  • Berlin residents can utilise REDSOFA’s salary survey for an overview of salary averages in the country’s capital city

As of April 2023 the average gross monthly salary was €4,323 according to Germany’s Federal Statistical Office.

Two-thirds of full time workers make less than this average monthly salary and one-third of workers earn more than this average monthly salary.

While wages after deductions may be less than similar roles in other countries, it is also important to take into consideration what other benefits come with a salary. Paid holiday leave, pension contributions, long notice periods and annual bonuses can help make up some of that difference. 

READ ALSO: How much do employees in Germany typically earn?

Check your payment schedule

Internationals can usually expect their salary once a month when working in Germany. Many German companies choose to pay employees either on the 1st or 15th of the month. It is also important to note that most employees can expect to receive their first pay check within 30 or 45 days of starting. 

For positions that offer yearly bonuses, these payments are included in a 13th pay check which are subject to income tax.  

A person works on a laptop.

A person works on a laptop. Image by Bartek Zakrzewski from Pixabay

How many hours do you work?

When looking for a job, don’t forget to check how many hours you can expect. Job descriptions will include expectations for time commitments. 

Mini-jobs, as expected from the name, are limited in hours and pay. Employees can expect up to €538 per month. Mini-jobs do not provide social security because they do not require social security contributions. Employees are also not automatically covered by health and nursing care insurance. 

Teilzeit, or part time jobs, are defined as any job where working hours are less than a full time position.

A common misconception is that part-time work requires working 20 hours or less a week. But an employee working five days a week for 30 hours, at a position that is typically 40 hours when full time can also be defined as a part time worker. 

READ ALSO: The rules in Germany around ‘mini’ and ‘midi jobs’

In fact, Germany has a term for workers who work between 28 and 36 hours a week. Vollzeitnahe Teilzeit, or nearly full time part time workers, can be a popular choice for some people, including parents. These positions can give employees more flexibility to balance work and family responsibilities. It is important to note that these workers are paid according to their time worked, so it will still amount to less than full time.

Depending on the work schedule, part time employees can earn the same amount of vacation as their full-time counterparts. That’s because holiday leave is calculated based on days worked, not hours. If a part time worker comes in five days a week, they will be eligible for at least 20 days of holiday. If that same part time worker comes in three days a week, they will be legally entitled to twelve days of vacation, even if they worked the same hours as the other employee. 

In most companies, weekly working hours between 35 and 40 hours are considered full-time employment or Vollzeitbeschäftigung

Watch out for the gross v. net difference

Before you sign the dotted line, it will be important to check how much of your gross salary you’ll be able to keep come pay day. Companies that include salary expectations in descriptions include gross salary (Bruttoeinkommen) – not the net income after taxes and deductions (Nettoeinkommen). The amount deducted will depend on how much you earn, the tax class you’re in and on other factors such as how much you’re paying for healthcare but it is usually around 40 percent. 

Salaried employees can find information on the deductions on their pay slip. Some to expect to see include:

  • Taxes are deducted directly from the gross pay. The amount is based on the tax bracket your salary falls within 
  • A percentage of your gross salary is also deducted for your pension / retirement contributions
  • Church taxes between eight and nine percent of your salary will also be due if you are affiliated with a religion
  • Unemployment insurance amounts to a 2.5 percent deduction from your gross salary. It is important to note that the insurance covers a salary up to €90,600 
  • Health insurance contribution rates are typically split between employers and employees. The rate depends on the provider. In 2024, the TK contribution rate to health insurance is 15.8 percent of the gross income

READ ALSO: What you need to know about your payslip in Germany 

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