The EU Council Presidency and European Parliament negotiators reached a political agreement on Tuesday night to establish a European minimum wage framework to ensure adequate statutory minimum wages.
“The EU Council Presidency and European Parliament negotiators have reached an interim political agreement on the draft EU minimum wage directive. The new law – once finally passed – will promote the adequacy of statutory minimum wages and thus help to achieve decent working and living conditions for European employees.
The Directive establishes procedures for the adequacy of statutory minimum wages, promotes collective bargaining on wages and improves access to minimum wage protection for those workers who are entitled to a minimum wage under national law, for example through a statutory minimum wage or collective agreements.
The adequacy of the statutory minimum wage
Member States with statutory minimum wages need to implement a procedural framework to establish and update these minimum wages according to a set of clear criteria. The Council and the European Parliament have agreed that updates to the statutory minimum wage will take place at least every two years (or at most every four years for those states that use an automatic indexing mechanism). The social partners will need to be involved in the procedures for setting and updating the statutory minimum wage.
Promoting collective bargaining on wage setting
Given that collective bargaining on wage setting is an important tool for ensuring that workers can benefit from adequate minimum wages, the directive aims to extend coverage to workers through collective bargaining. That is why the co-legislators agree that states should promote the strengthening of the capacity of the social partners to engage in collective bargaining, including the protection of workers’ representatives.
The Interim Agreement between the Council and the European Parliament provides in particular that where the coverage rate for collective bargaining is less than a threshold of 80%, Member States should establish an action plan to promote collective bargaining. The action plan should set out a clear timetable and concrete measures to progressively increase the coverage rate through collective bargaining.
The Council and the European Parliament also agree on measures to improve the effective access of workers to the protection of the minimum wage. These measures include inspections by labor inspectorates, easily accessible information on minimum wage protection and the development of the ability of implementing authorities to pursue non-compliant employers, ”an EU Council statement said.
The European Commission’s proposal was forwarded to the two co-legislators – the EU Council and the European Parliament – on 28 October 2020. The Council approved its position on 6 December 2021; Parliament adopted its negotiating mandate on 25 November 2021.
Eight rounds of negotiations between the Council and the European Parliament have taken place since the beginning of January.
On the part of the Council, the agreement reached today will have to be confirmed by Coreper. This support will be followed by a formal vote in both the Council and the European Parliament.
EU governments will decide by a qualitative majority on 16 June on the agreement. The European Parliament’s working committee is due to vote in June and the directive to be adopted in September.
Member States have two years to transpose the Directive into national law.
“Today, many workers are struggling to make ends meet: shop assistants, parcel deliverers and distribution workers keep our companies afloat. Even if I work 40 hours hard, I can’t pay the prices that have exploded in stores and on energy. Underestimated and poorly paid, they summarize their situation. They also deserve respect and fair payment. After decades of real wage decline, it is time to reverse this downward trend and forcefully combat rising inequality.
The salary of every European worker has to pay for his food, rent and heat, but he also has to afford new clothes or sometimes go on holiday. We want EU countries to check their minimum wages against international standards; such as at least 50% of the average gross salary and 60% of the average gross salary. Currently, 18 EU countries do not meet these criteria. This new EU law will increase the salaries of millions of Europeans, “said Agnes Jongerius, a spokeswoman for the European Social Democrats (S&D) and a European Parliament negotiator.
According to Eurostat, one in ten European workers is at risk of poverty, a number that rises to one in six for part-time workers. About 70% of low-wage workers have difficulty coping. According to the Böckler Foundation, 60% of minimum wage workers are women, according to an S&D statement.
Klaus Iohannis: “Our desire is what is called European convergence”
Asked at a news conference about the political agreement on the Minimum Wage Directive, President Klaus Iohannis said on Tuesday:
“The minimum income must ensure a decent minimum living, but we must also take into account the differences in development between countries. One is the minimum income that ensures a decent living in a country with a very high standard and another is in a country like ours that wants to reach that high standard. We cannot have the same amount if we want to have the same effect, but our declared desire is what is called European convergence, that is, to reach the level of the states that we consider developed or highly developed. This requires again a determined government, with a solid majority in Parliament, which comes with investments, with longer-term approaches, which comes with a well-developed PNRR. These things will eventually lead, although we are now in a rather difficult economic situation, to the development of the general level “, said Klaus Iohannis.
Editor: Alexandru Costea
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