Last week the Presidency of the Council and the European Parliament announced their provisional agreement on the draft Directive on adequate minimum wages in the European Union. This directive builds on the European Pillar of Social Rights, specifically Principle 6, which promotes fair working conditions. More concretely, the Directive aims to promote statutory minimum wages and thus ensure decent working and living conditions for European employees.

Importantly, this Directive establishes a framework for adequate minimum wages rather than setting a common European minimum wage. This is due to Member states’ differing labor market models and income levels. Instead, Member States will be asked to establish procedural frameworks to set and update minimum wages based on clear criteria. Relatedly, these updates will occur at least every two years and involve social partners. Last, responding to the significance of collective bargaining in ensuring workers benefit from adequate minimum wages, Member States with low collective bargaining will be requested to submit national action plans to reverse this low threshold.

Finally, before becoming a new law, the agreement needs to be confirmed by the Committee of the Permanent Representatives of the Governments of the Member States to the European Union (COREPER). This will be followed by a formal vote in the Council and European Parliament. After these steps, Member States will have two years to transpose the Directive into national law.

To read more about this provisional agreement on adequate minimum wages, please click here.