On September 14, 2022, the European Parliament finally approved the directive implementing the minimum wage principle in the European Union. The directive was also finally approved on October 4 by the Council of the European Union.
The goal is to ensure “a reasonable standard of living”, the directive states. The latter does not provide for a precise level of minimum wage, giving full flexibility to member countries, which must ensure more transparency in salary determination.
The directive introduces an obligation for countries to establish a reliable monitoring system, as well as controls and inspections, to deal with illegal subcontracting, fictitious self-employment or unregistered overtime.
In addition, it establishes procedures to set minimum wages, promote the involvement of collective bargaining on wage setting and improve effective access to minimum wage protection for workers who are entitled to a minimum wage under national law. Indeed, member states with statutory minimum wages will have to establish a procedural framework for setting and updating minimum wages according to a range of clear criteria.
Another goal is to increase the number of workers subject to collective bargaining. To this end, countries should promote the capability of social partners to participate in collective bargaining. Should, the collective bargaining coverage rate fall below a threshold of 80%, member states should establish an action plan to promote collective bargaining involvement.
Member states will have two years to implement the directive.
