Study shines light on mini-jobs
The European Commission has commissioned and published a study on mini-jobs in Germany.
KL – 04/2018
The European Commission has introduced its Social Fairness Package as part of implementing the European Pillar of Social Rights. Part of this initiative is concerned with ensuring access to social protection for all workers, including the self-employed (see our article March 2018).
For the impact assessment, the European Commission commissioned six case studies on access to social protection for non-standard forms of employment in the Member States of Germany, Poland, the Netherlands, Romania, Spain and Italy. These have now been published. One of these studies examined access to social protection in Germany for workers in mini-jobs.
What is a mini-job?
In Germany, mini-jobs are a form of marginal employment where a person either earns a maximum of €450 per month or only works for a maximum of 70 days per calendar year.
The authors of the study note that mini-jobs have become a key feature of the German labour market, as now one fifth of all dependent employees in Germany hold a mini-job. The most common form of mini-job is the one with a monthly income ceiling of €450. Of the total 7.6 million people with a mini-job, the vast majority of them (4.9 million) have a mini-job as their main occupation.
Who works in mini-jobs?
According to the authors, the group of persons with a mini-job is highly diverse, ranging from school students to pensioners. Mini-jobbers mainly consist of:
- people working in lower and middle-income segments who have a mini-job as their second job;
- housewives and pensioners who have a mini-job as their main job;
- school and university students; and
- the unemployed who are supplementing their unemployment benefits.
Social protection in the social insurance branches
By and large, mini-jobbers are covered by statutory health insurance because more than 96% of mini-jobbers have derived entitlements (for example, through their primary job or family insurance) due to the general obligation to take out health insurance.
As far as statutory pension insurance is concerned, mini-jobbers often opt out from making employee contributions to pension insurance schemes and thus very few mini-jobbers acquire better pension entitlements.
The authors of the study believe that the existing regulations on mini-jobs mean that divorcees are particularly at risk of not having adequate social security, because derived entitlements to statutory health insurance and pensions are lost following a divorce.
In addition, mini-jobbers are not covered by long-term care and unemployment insurance. It is also unlikely that mini-jobbers will acquire entitlements to company pensions.
The authors of the study also comment on other issues. For example, they state that mini-jobbers often have a lack of information about their labour rights, which in practice leads to a lack of protection by labour market regulations.
The authors also believe that mini-jobs tend to subsidise the expansion of the low-wage sector. They argue that this is due to the reduction of non-wage labour costs and possible tax savings that the existing schemes offer to both employers and workers.
According to the authors of the study, mini-jobs also encourage traditional role allocation in families, since they offer a strong incentive for women to work only a few hours. To counter this, women should be encouraged to acquire their own pension rights in order to prevent poverty in old age.
In addition, there is a low tendency to move from a mini-job into standard employment. Furthermore, it is possible that rather than boosting employment, the concept of mini-jobs is actually reducing the volume of work.
The authors of the study argue that it would be advisable that all types of employment, including mini-jobs, be subjected to the same rules on social security contributions.
The study does not reflect the views of the European Commission but rather of the authors.
The full study can be viewed online here.