On 6th December, the Council agreed its position on a Commission proposal for an EU law on adequate minimum wages. This decision paves the way for negotiations between Parliament and member states, possibly leading to the adoption of the directive as soon as Spring 2022.
La Strada International is happy with this agreement and believes that adequate minimum wages can help to achieve more decent working and living conditions in the EU. However, it should be noted that many migrant workers are pushed to work irregularly and take undeclared jobs and might still have no access to decent employment and an adequate minimum wage.
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To improve working and living conditions within the EU, this draft law establishes a framework to promote adequate levels of statutory minimum wages, promote collective bargaining on wage setting and improve the effective access to minimum wage protection of those workers who are entitled to a minimum wage.
Countries with a high collective bargaining coverage tend to have a smaller share of low-wage workers and higher minimum wages than those with low collective bargaining coverage. This is why EU ministers agreed that countries should promote strengthening the capacity of social partners to engage in collective bargaining. If their collective bargaining coverage is below 70%, they should also establish an action plan to promote it.
EU member states with statutory minimum wages are tasked to put a procedural framework in place to set and update these minimum wages according to a set of stable and clear criteria. They will be updated in a regular and timely manner. Ministers also agreed on a number of measures to enhance the effective access to minimum wage protection: appropriate controls and inspections, easily accessible information on minimum wage protection, a recall of the existing rules on public procurement, a right to redress and penalties for non-compliant employers.
Data collection and reporting
The agreed text also foresees that member states should monitor the coverage and adequacy of minimum wages. In addition, they will be asked to report every two years to the Commission on the rate of collective bargaining coverage, the level of the statutory minimum wages and the share of workers covered by them. Member states with collective agreements shall report on the lowest pay rates set thereby and on the wages of those not covered by such agreements. The Commission will analyse this date and report to the Council and the European Parliament.
In the EU, there exist large differences between member states in the coverage of workers by collective agreements and the level of minimum wages. This is also the effect of the very different labour market models in member states. While respecting these differences, the draft law sets a procedural framework to promote a better and more effective minimum wage protection across the EU.
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The European Commission proposal was put forward to the two co-legislators on 28 October 2020. The general approach text reached on 6 December provides the Council presidency with a mandate for negotiations with the European Parliament. Both the Council and the European Parliament will need to agree on a final text. (Source European Commission). See also this article on LSI’s website.