The Bundesrat (upper house of the German parliament) has now approved the “Act on the Temporary Reduction of the Value-Added Tax Rate on Gas Supplies“, so that it can enter into force in the near future.
Purpose, design and period
In addition to the regulation regarding the tax reduction, the law also includes the so-called “inflation compensation premium“. In view of sharply rising consumer prices and record inflation rates, the German government would like to motivate employers to make bonus payments to their employees in order to cushion the increased financial burdens.
For this purpose, employers are given the option of making special bonus payments of up to EUR 3,000 to their employees. Like the “Corona Bonus” of 2020/2021, the special payments are exempt from tax and social security contributions.
Employers are not obliged to pay the inflation compensation bonus. Employers are also largely free to determine the specific details if they decide to pay.
In addition to the maximum amount, the legislator has only limited the incentive period from October 1, 2022 to December 31, 2024. Furthermore, the bonus must be paid in addition to the normal salary. As with the “Corona Bonus,” it cannot be offset against the base salary.
Employers are free to decide for themselves how high any bonus payments should be, when the payment should be made and whether it should be a one-off payment or whether several partial amounts should be paid (when paying partial amounts, reference should be made to the voluntary nature of the benefit). It is also possible to grant non-cash benefits in the appropriate amount. It should be absolutely clear from the salary statement that this is the inflation compensation bonus.
Principle of equal treatment
In this context, it is important to observe the principle of equal treatment under labor law. If an employer does not wish to pay the bonus to all employees, objective and comprehensible differentiation criteria are required when selecting the beneficiary employees. For example, differentiation on the basis of salary is a good idea, since it can be assumed that employees with lower salaries will suffer particularly from the most recent price increases because they often lack savings to compensate for such situations.
According to the case law of the highest courts, a violation of the principle of equal treatment would regularly result in groups of employees who were initially excluded from the payment of bonuses being able to demand such a payment retrospectively, with the result that a considerable additional financial burden would arise.
The works council also has a right of co-determination with regard to the payment procedure pursuant to § 87 (1) No. 10 BetrVG (German Works Constitution Act).