According to mayor Bernd Pohlers of the eastern town of Saxony Waldenburg, the asylum seekers refused to accept the work that was offered to them after they arrived in the country. The local council spent £600 arranging for the men to have uniforms but were stunned when they were told they would not complete it because they were "guests of Angela Merkel".
While asylum seekers are not allowed to work under immigration rules within the EU, they are allowed to do voluntary work.
However officials in the district of Zwickau came up with a plan to help encourage those without employment to get back to work and to help them become more accepted within the local community.
In order to do this they created voluntary jobs which included a nominal payment of £18 for 20 hours work.
But all of the male residents of the local refugee accommodation who initially agreed to get involved in the charitable activities quit after discovering there was a minimum wage £7.30 (€8.50) in Germany.
The men had been picked up and offered transportation from their paid-for housing where they are also given food and then dropped home.
Mayor Pohlers said: "It was subsequently argued by these people that they are guests of Mrs. Merkel and guests do not have to work.
"Furthermore, they were of the opinion that there is a minimum wage (€8.50) in Germany, and that this had to be paid by the City Waldenburg."
Despite attempts at mediation the asylum seekers refused to return to work.
Mayor Pohlers added: "In a specially convened meeting with an interpreter the authorities explained the rules again.
"Unfortunately, no agreement could be reached on the continuation of the measure."
Now all seven of the jobs have been scrapped.
The mayor spoke out in a bid to highlight the issue of the asylum crisis in Germany.
Ms Merkel and her husband visited the opera this month after terror attacks GETTY Ms Merkel and her husband visited the opera this month after terror attacks He said he is aware his statements could play into the hands of those opposing the mass migration.
However after having raised money from the local community to help aid the asylum seeker's transition into the community, he felt compelled to speak out.
He added: "I see it as my duty to inform you about the current situation, even if it was difficult and I was discouraged from many sides."
The city Waldenburg confirmed that the asylum seekers are still not working.
However the reaction of the men has not gone down well with the community who are concerned that they are being silenced over the issue of immigration.