The European Commission launched legal action against Germany on Tuesday, accusing the government of illegally applying the national minimum wage to a number of trucking and haulage companies from Austria, Poland and Hungary.
The EU's powerful regulator objects to the application of a national minimum wage to lorry drivers passing through the country even just for a few hours and the substantial paperwork associated with that.
"Whilst fully supporting the introduction of a minimum wage in Germany, the Commission considers that the application of the Minimum Wage Act to all transport operations which touch German territory restricts the freedom to provide services and the free movement of goods in a disproportionate manner," the Commission said in a statement.
Germany introduced a national minimum wage of 8.50 euros ($9) an hour on January 1, even for foreign truck drivers simply passing through to other destinations.
The companies affected in March asked the Commission to examine whether applying the minimum wage in this way is compatible with European law.
The launch of the case in Brussels is the first step in a procedure that can end with hefty fines for Germany, which has two months to respond.
"The application of German measures to transit and certain international transport operations can in the Commission's view not be justified, as it creates disproportionate administrative barriers which prevent the internal market from functioning properly," it said.
The Commission said it believed that "more proportionate measures" existed to safeguard these workers while still "allowing for free movement of services and goods."
Germany is the only European country that includes transit workers in the minimum wage. Berlin argues the policy was needed to stave off wage dumping.
Given the protests from foreign companies, Berlin agreed to a temporary suspension for foreign road haulage companies until the EU's rules on the issue can be clarified.
Germany's new measure required a Polish truck driver who is heading to Spain to be paid at 8.50 euros per hour from the moment the driver crosses the German border, before reverting to the wage paid in the driver's home country on leaving German soil.
The driver's employer also faced administrative paperwork under the measure and a fine if the drivers were not paid accordingly.