Late salary is one of the most common reasons employees come to us — and one of the most clearly resolvable. Under § 614 BGB the salary is due after the work has been performed; the employment contract typically fixes a concrete payment date. Once that date passes without payment, your employer is in default (Verzug) and you have a range of options.
Step 1: Written demand
Send a written demand for payment (Mahnung), naming the unpaid period and the amount, with a reasonable deadline (typically 5–10 working days). Email is fine; we usually send it by both email and post with proof of delivery. The demand also formally starts the running of statutory default interest of 5 percentage points above the base rate.
Step 2: Preserve the claim against an exclusion clause
Most German employment contracts contain a two-step exclusion clause (Ausschlussfrist): you have three months from the due date to assert the claim in writing. The Mahnung in Step 1 takes care of this — provided it specifically identifies the amount and period claimed. Generic complaints do not suffice.
Step 3: Right to withhold work (Zurückbehaltungsrecht)
If significant arrears have built up (usually two or more months’ pay), you can refuse to perform further work until paid, under § 273 BGB. This must be communicated clearly in writing to the employer beforehand. The right is powerful but legally delicate — get advice before exercising it, because a poorly executed withholding can be reinterpreted as unauthorised absence.
Step 4: Extraordinary termination by you
Where the employer has failed to pay substantial amounts despite written demands and reasonable deadlines, you can terminate the employment without notice (§ 626 BGB) and claim damages for the lost notice period. The labor court is usually generous with employees in this situation — provided the documentation is in order.
Step 5: Labor court action
If the employer does not respond, we file a wage claim (Zahlungsklage) at the labor court. The procedure is faster than dismissal cases: many wage claims are resolved at the conciliation hearing within 6–8 weeks, often with a payment schedule.
If the employer is insolvent
If the employer has filed for insolvency or is in financial distress, special rules apply. You may be entitled to insolvency wages (Insolvenzgeld) from the Agentur für Arbeit for up to three months of unpaid pre-insolvency salary. The application deadlines are tight — typically two months from the date the insolvency was opened.
The default-interest calculation
Once the employer is in Verzug, default interest accrues automatically at the statutory rate of 5 percentage points above the Bundesbank base rate (§ 288(1) BGB). The current base rate is published quarterly. Example: with a base rate of 3.62% and arrears of €5,000 unpaid for 60 days, the interest is approximately €70. Small in itself, but it makes the demand letter feel sharper.
The Insolvenzgeld route
If the employer is in financial distress and you suspect insolvency proceedings are coming, file the Insolvenzgeld application with the Agentur für Arbeit promptly. Insolvenzgeld covers up to three months of unpaid pre-insolvency salary at the net amount, paid by the federal employment agency. Deadlines: within two months of the insolvency being opened by the court. Acting early protects the claim even if the company subsequently does fail.
Quick decision tree
- 1–2 weeks late, otherwise stable employer? — Friendly written reminder.
- 3+ weeks late, no plausible explanation? — Formal Mahnung with deadline.
- Multiple months unpaid, employer evasive? — Withholding of work + labor-court claim.
- Signs of insolvency? — Insolvenzgeld application + labor-court claim.