Bonus for employees: Extra money from the boss to compensate for inflation

Millions of employees in Germany have already received or been promised a tax and duty-free "inflation compensation premium".

Bonus for employees: Extra money from the boss to compensate for inflation

Millions of employees in Germany have already received or been promised a tax and duty-free "inflation compensation premium". Everyone else can keep hoping: for two more years, companies have the chance to pay their employees up to 3,000 euros net. In the collective bargaining for the public sector, the post office, the food industry and the hospitality industry, which begins in January, the premium is part of the bargaining chip.

"We assume that the inflation compensation premium will also be part of other wage agreements and will therefore benefit many employees," says Michael Schrodi, spokesman for finance for the SPD parliamentary group. The one-off payments are intended to help employees in times of skyrocketing prices - without burdening the companies with permanently higher personnel costs and starting a wage-price spiral that further fuels inflation.

These industries pay the premium

The 4.5 million employees in the metal and electrical industry and the chemical and pharmaceutical industry will receive a net payment of 3,000 euros in two tranches in 2023 and 2024 - in addition to wage increases. This is what trade unions and employers have agreed in the new collective agreements in the sectors. The bonus not only benefits the employees of DAX companies such as BASF, Bayer, BMW, Fresenius, Henkel, Mercedes and Siemens, but also the employees of countless small companies.

Two weeks ago, the Catholic welfare organization Caritas also decided to pay its 650,000 employees 3,000 euros net. This is a first partial conclusion of the upcoming 2023 collective bargaining round, "we are definitely keeping an eye on this during the negotiations," said Caritas manager Norbert Altmann.

opinions

The Verdi union welcomes one-off payments, such as those made by Deutsche Bank, Commerzbank and ING-Diba outside of the collective bargaining round. "However, we do not see these payments as an alternative or even a replacement for table-based wage increases, since they quickly "fizzle out" and nothing remains in the long run," says Norbert Reuter, head of the collective bargaining policy department at Verdi. Verdi is demanding a wage increase of 10.5 percent for the 2.5 million federal and local employees in the collective bargaining negotiations that begin in January. "Our goal is to negotiate one-off payments on top."

Ifo President Clemens Fuest, on the other hand, says: "In terms of collective bargaining policy, it makes sense, given the high level of economic uncertainty, to provide for one-off payments instead of permanent wage increases." However, he criticizes the fact that the state subsidizes this: "The tax and duty exemption of the 3000 euro one-off payment does not make financial sense. Such bonuses are mainly given to employees with medium and high incomes, but state aid should be limited to the lower range in the current situation limit income," says the economist.

Trade unionist Reuter is also bothered by the fact that the state and social security funds are missing out on contributions. Like the employees, the companies are also saving, but "they are not affected by the resulting reductions in social spending and social security benefits".

Price increases and shortage of skilled workers

Hospitality, trade and health services are desperately looking for skilled workers, according to the BGL industry association, there is a shortage of almost 90,000 drivers in goods transport. At least occasionally, companies use the opportunity to advertise themselves with the bonus. The logistics group Kühne Nagel, for example, pays 500 euros net twice. BGL board spokesman Dirk Engelhard says, however, that this cannot be a benchmark for the small, average company. And the fact that "even such a "giant" is far from exhausting the full extent of what is legally possible can undoubtedly be interpreted as a sign of the recession looming in 2023".

"A baker who suddenly has to pay 15,000 euros per month for electricity and gas instead of 1,500 no longer needs to think about wage increases or one-off payments," employers' president Rainer Dulger told the editorial network Germany. On the other hand, according to the Ifo Institute, many companies have used the increased energy costs as an excuse to raise prices and expand their profits - for example in construction, trade, transport and hospitality.

The deputy chairman of the Food, Enjoyment and Restaurants Union (NGG), Freddy Adjan, also includes Nestlé, Unilever and Coca-Cola: "They are winners of the crisis." In the upcoming collective bargaining rounds in the food industry and in the hospitality industry with a total of over two million employees, the NGG is demanding at least 10 percent more wages. "If that fits into the collective bargaining, there can be an inflation premium on top. But not the other way around," says Adjan. "And wherever we are not currently in collective bargaining, we expect that the corporations will now quickly pay out an inflation compensation premium."

The coffee roaster Jacobs, the chocolate manufacturers Ferrero, Lindt and Storck, the Meggle dairy and the Steigenberger hotel chain, for example, pay between 300 and 1000 euros, according to NGG. Employees at Lidl and Rewe, the Sana clinics, RWE and Deutsche Bahn also receive bonuses. But it's still too early for an interim assessment - Adjan and Schrodi agree on that.

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