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On October 28, 2020, the European Commission presented a proposal for a directive to establish adequate minimum wages in the European Union. The European Commission has not proposed a single minimum remuneration at European levelas we often hear. Only the establishment of a framework for adequate minimum wages in Europe, which will not lower the French minimum wage!
This directive was adopted by the European Parliament and the Council of the EU in October 2022 and must be transposed into national law by the end of 2024.
What is the “European minimum wage”?
The term “European minimum wage”, a shorthand term for the Commission’s proposal on adequate minimum wages in the European Union, can lead to confusion. In reality, the European Commission has not proposed a single minimum wage in Europe, but a European framework so that workers in the European Union are protected by adequate minimum wages allowing them to live with dignity regardless of where they live. they work.
What is the current situation in the EU?
As of January 1, 2024, 22 EU member states have a minimum wage income at national level. This remuneration varies between 477 euros gross per month in Bulgaria and 2,570 euros gross in Luxembourg. France, with a minimum wage of 1,766 euros gross per month, ranks 6th on a European scale. Five states – Denmark, Italy, Austria, Finland and Sweden – have minimum wages defined by sector, through collective agreements.
The principle of an adequate minimum wage is enshrined in the European Pillar of Social Rights. However, workers are still faced with the insufficiently adequate protection offered by minimum wages. If in recent decades, low wages have not increased at the same rate as other wages, the at-risk of poverty rate at work has decreased, from 9.8% in 2016 to 8.5% in 2022.
What does the new directive bring?
In view of this situation, the EU has adopted new rules to promote adequate legal minimum wages in Europe and to improve the working and living conditions of workers. The directive on adequate minimum wages was adopted by the European Parliament on September 14, 2022 and then by the Council on October 4, 2022. Member States have two years to transpose the directive into national law.
The directive creates a framework to make minimum wages adequate and improve workers’ access to the protection offered by minimum wages in the EU. Concretely, collective negotiations on wages will be encouraged in all Member States. Countries with high collective bargaining coverage generally have a lower proportion of low-wage workers, higher minimum wages relative to the median wage, lower wage inequality, and higher wages than other countries.
Alternatively, Member States in which statutory minimum wages exist are required to put in place clear conditions allowing them to set minimum wages at adequate levels.
To summarize, the Directive aims:
- improving the adequacy of legal minimum wages (where they exist),
- the promotion of collective bargaining in all Member States,
- better application of rules and better monitoring for all Member States.
The directive also helps to protect the wages of vulnerable workers, reduce in-work poverty and pay inequality, and strengthen work incentives.
The directive relating to adequate minimum wages will not lower the French minimum wage!
The directive fully respects the principle of subsidiarity: it establishes a framework relating to minimum standards, respecting and reflecting the competences of the Member States as well as the autonomy and contractual freedom of the social partners in matters of wages. It does not oblige Member States to establish a legal minimum wage, nor does it set a common minimum wage level! It continues to strengthen the social acquis and the fight against social dumping.
To know more
Questions and answers: adequate minimum wages
Directive on adequate minimum wages in the European Union
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