Politicians in Brussels have reached a deal on how EU countries will ensure adequate minimum wages in a move that will protect workers at a time of soaring inflation and a cost of living crisis.
In the deal agreed between the European Council and parliament on Tuesday, member states will collect data on minimum wage coverage, assess prices for common household items and promote the principle of collective bargaining to help enforce companies to pay fair salaries.
“This is a good day for social Europe. We have reached an agreement on the directive on adequate minimum wages in the EU. This is especially important at a time when many households are worried about making ends meet,” said Nicolas Schmit, European commissioner for jobs and social rights.
MEPs, member states and the European Commission agreed to establish a framework for setting statutory minimum wages. They include obligations on member states to establish clear criteria for updating minimum wages every two to four years and the establishment of consultative bodies in which “social partners” such as unions are able to take part.
EU countries would also have to collect data on minimum wage coverage and adequacy, and make sure workers had access to dispute resolution mechanisms, the EU’s executive said.
“The new rules will protect the dignity of work and make sure that work pays,” said commission president Ursula von der Leyen in a Twitter message.
The provisional agreement is expected to be signed off by parliament and member states this month, then published in the EU’s official journal. Countries will have two years to implement the rule after its publication.
The new law will include provisions for the promotion and facilitation of collective bargaining on wages by trade unions and employers in all member states.
“Countries with high collective bargaining coverage tend to have a lower share of low-wage workers, lower wage inequality and higher wages,” the commission said. Member states whose collective bargaining coverage was assessed at less than 80 per cent of workers would have to set up a plan to facilitate such talks between employers and workers, it added.
Agnes Jongerius, one of the MEPs backing the proposed law in the parliament, said: “In the last decade wages have stayed behind the rise in productivity. Workers caught a smaller piece of the pie. This is especially true for those earning the lowest wages.”
She said workers had been the victims of policymakers pushing for a reduction in the scope of welfare systems after the global financial crisis.
While the directive needs only a qualified majority of votes from member states to be adopted, Denmark is likely to vote against it on the principle that the country does not think the EU should meddle in issues related to wages, said two people familiar with the Danish position. In recent years other Nordic countries had also expressed concerns that such a law would undermine their collective bargaining systems.
Separately, the commission, parliament and member states are close to agreeing a deal on a law obliging companies to have a target of achieving 40 per cent female participation on their boards. The commission first proposed the directive in 2012 but it had encountered opposition from countries including Germany and some Nordic and Baltic states.
