Is the inflation adjustment payment also available during parental leave?
A Special Bonus to Compensate for Inflation: Employers can still pay tax-free bonuses to their employees up until the end of 2024. But can employees on parental leave be excluded?
Employers can pay a tax-free bonus to their employees to mitigate the effects of inflation. Not every employee, however, receives this bonus. For instance, can companies exclude employees on parental leave?
This question was addressed by the (Az.: 3 Ca 2231/23). In the specific case reported by "Haufe.de", a woman sued her employer because they had excluded her from receiving a contractually mandated inflation adjustment payment due to her parental leave.
Collective Agreement Provision for Inflation Mitigation
According to the collective agreement for their employment relationship, this woman is subject to the collective agreement for the public sector. This agreement stipulates an entitlement to a bonus for inflation relief in 2023. Employees on parental leave, however, are excluded from this provision according to the specified regulation. The condition for payment is that the employee must have had a claim to wages at some point between January 1, 2023, and May 31, 2023.
The woman, however, only resumed part-time work in December 2023 with a workload of 24 hours per week, for which she was granted a pro-rata bonus of €135.
Court: Employees on Parental Leave Must Receive Bonus
The employee filed a lawsuit against her employer's actions and won. The court's decision: The collective agreement provision in this case was deemed invalid because it violated the general equality principle in the Basic Law. Employees on parental leave must therefore also receive the inflation bonus.
Although it is generally permissible to exclude employees in parental leave from certain benefits, the court found that the distinction between the group of eligible and ineligible individuals in this case was not justifiable.
Voluntary Payment Possible until End of 2024
Approximately 26 million employees in Germany received inflation adjustment bonuses between 2022 and 2024, according to a study by the Institute for Macroeconomics and Business Cycle Research (IMK) of the Böckler Foundation. The employer can make this voluntary payment in addition to regular income in one lump sum or in installments. From October 26, 2022, to December 31, 2024, the bonus is tax- and social security contribution-free up to a maximum of €3,000.
- The tax office will need to consider this court judgment when handling legal issues related to inflation bonus payments and parental leave.
- Some employers may seek advice from tax policy advisors to understand the implications of the court's ruling for their relief package.
- Despite the federal government's tax policy allowing tax-free bonuses during the energy crisis, this case highlights the importance of treating all employees fairly, including those on parental leave.
- The employer in this case was found to have violated the general equality principle in the Basic Law, leading to a court order to pay the inflation bonus to the employee on parental leave.
- The salary of an employee on parental leave should not be the sole determining factor in their eligibility for inflation relief bonuses, according to the court's judgments.
- Companies should review their collective agreement provisions related to inflation mitigation and ensure they do not discriminate against employees on parental leave.
- The federal government may need to revise its tax policy to provide clearer guidelines for employers regarding the inclusion of employees on parental leave in relief packages.
