In a new deal struck by the EU government, there will be a new set of rules that determines whether or not a member state’s existing statutory minimum wages (i.e. the lowest permitted by law) are sufficient to ensure a decent standard of living for the Union’s lowest-paid workers. The laws will cover countries that have existing minimum wage laws however, those in which the minimum wage is protected exclusively via collective bargaining agreements will not be obliged to introduce a minimum wage law or adhere to the new rules.
Under the deal, the 21 countries that will be required to follow the common rules will need to check whether their minimum wage is sufficient by comparing it against a basket of goods or services or set the level at 60% of the gross median wage and 50% of the gross average wage.
In the six countries that do not have a statutory minimum wage (Austria, Cypris, Denmark, Finland, Italy and Sweden), the planned directive is unlikely to affect any wage-related discussions as wage levels are determined through collective bargaining —through trade unions etc.
In states in which less than 80% of the workforce are protected by collective bargaining, an action plan will be required to increase the representation and protection of wages to low-income workers.
It is estimated that one in ten workers across the EU earns the minimum wage though the level differs from country to country. Luxembourg has the highest minimum wage in the EU at €13.05 per hour (€2,202 per month) and Bulgaria has the lowest at €2.19 (€332 per month).
Ursula von der Leyen, President, European Commission said, “The new rules on minimum wages will protect the dignity of work and make sure that work pays.”
The directive comes about as a result of 22 countries failing a test which measured the ability of minimum wage earners to lead a decent life, taking into account the cost of living and the wider level of salaries.
Paul Arkwright
Publisher
