European Commission proposes adequate minimum wage protection for workers

The European Commission has proposed an EU Directive to ensure that the workers across all Member States are protected by adequate minimum wages

The new proposals set by the European Commission, to ensure workers across all Member States are protected by adequate minimum wages, will reduce wage inequality, help sustain domestic demand and strengthen incentives to work. The EU Directive will also help reduce the gender pay gap since more women than men earn a minimum wage.

Countries with statutory minimum wages should put in place clear and stable criteria for minimum wage setting, indicative reference values to guide the assessment of adequacy and provide regular and timely updates of minimum wages.

Member States will be required to provide an annual report to the European Commission with data on the minimum wage protection.

It is important to note that the Commission’s proposal does not oblige Member States to introduce statutory minimum wages, nor does it set a common minimum wage level.

The current pandemic has particularly affected low-wage workers but ensuring a decent living for workers and reducing in-work poverty is not only important during the crisis, it is also essential for a sustainable and inclusive economic recovery.

President of the European Commission Ursula von der Leyen said:

“Today’s proposal for adequate minimum wages is an important signal that also in crisis times, the dignity of work must be sacred. We have seen that for too many people, work no longer pays. Workers should have access to adequate minimum wages and a decent standard of living. What we propose today is a framework for minimum wages, in full respect of national traditions and the freedom of social partners. Improving working and living conditions will not only protect our workers, but also employers that pay decent wages, and create the basis for a fair, inclusive and resilient recovery.”

Executive Vice-President for an Economy that Works for People, Valdis Dombrovskis, said:

“It is important to ensure that also low wage workers benefit from the economic recovery. With this proposal we want to make sure that workers in the EU earn a decent living wherever they work. Social partners have a crucial role to play in negotiating wages nationally and locally. We support their freedom to negotiate wages autonomously, and where this is not possible, we give a framework to guide Member states in setting minimum wages.”

Nicolas Schmit, Commissioner for Jobs and Social Rights, said:

“Almost 10% of workers in the EU are living in poverty: this has to change. People who have a job should not be struggling to make ends meet. Minimum wages have to play catch up with other wages which have seen growth in recent decades, leaving minimum wages lagging behind. Collective bargaining should be the gold standard across all Member States. Ensuring adequate minimum wages is written in black and white in Principle 6 of the European Pillar of Social Rights, which all Member States have endorsed, so we are counting on their continued commitment.”