BEERG Special 2022 Preview - EU Proposed Directive On Adequate Minimum Wage

This Directive does not seek to impose a uniform minimum wage across the European Union. That would be impossible given the widely different GDP and income levels between different member states. For example, currently the minimum wage per month is €2,202 in Luxembourg compared to €515 in Romania and €332 in Bulgaria. 

What the Directive would do is to ensure that each EU member states has an adequate minimum wage, whether fixed through law or collective bargaining. How you define “adequate” is obviously critical and will be the subject of intense negotiations between the Council of Ministers and the EU Parliament. The original draft from the Commission suggested a figure of 60% of median wages.

What will be of most concern to member companies is the language in the Directive that would impose an obligation on member states to take action where collective bargaining coverage fell below 70% of the workforce. The Parliament want to push that figure up to 80% and require detailed plans from member states on how they were going to hit that target. For its part, the Council favours a less prescriptive approach, with member states facilitating collective bargaining, but not imposing it as the Parliament appears to want.

The French have the presidency of the EU Council for the first six months of 2022 and can be expected to push hard for negotiations to be closed out before the presidential election in April. A Directive on European minimum wages would be a nice win for President Macron, allowing him to say that he was “delivering social Europe.”

“We have to prove to our citizens that the Union is able to guarantee fundamental rights, in particular, the right to be able to live from your work,” a French representative is quoted as saying during the Council meeting which signed off on the negotiating mandate for talks with the Parliament.