The Federal Labor Court (BAG) dealt with the question of whether the managing director of a GmbH is personally liable for damages to the plaintiff employee due to unpaid compensation in the amount of the statutory minimum wage.
Decision of the BAG: No Liability
The Federal Labor Court (BAG) denied personal liability of the managing director for the failure to pay the minimum wage because the regulatory offense under the Minimum Wage Act (MiLoG) does not constitute a protective law for employees in relation to the company’s directors under Section 823(2) of the German Civil Code (BGB).
The GmbH (limited liability company) is liable as an employer solely with its corporate assets due to the statutory limitation of liability under Section 13(2) of the GmbH Act (GmbHG). The GmbH Act does not provide for personal liability of managing directors to third parties. While the legislator can expand this liability system, for a managing director’s liability under Section 823(2) of the BGB to be established, a protective norm must clearly indicate that, according to the legislator’s intent, the company’s directors should also be personally liable.
Regarding the regulatory offense under the Minimum Wage Act (MiLoG), the BAG could not identify such legislative intent.
This decision is to be agreed with. Otherwise, GmbH managing directors could be held liable for damages in the amount of the statutory minimum wage by the company’s employees, even in cases of (mild) negligence in fulfilling the regulatory offense. The further consequence would be that, concerning the payment of the minimum wage, employees would have additional debtors in addition to the GmbH as their contractual employer.
The question of whether the solvency of the employer at the time of the minimum wage claim’s due date is a prerequisite for the application of Section 21(1) No. 9 MiLoG remains unanswered. According to the court’s opinion, there is much to suggest this (see Section 18 of the decision).