The European Directive regulating minimum wages is published in the Official Journal of the European Union (OJEU)
Labor and Employment Law Alert
The directive establishes procedures for the adequacy of statutory minimum wages, promotes collective bargaining on wage-setting and improves effective access to statutory minimum wage protection for those workers who are entitled to such protection under applicable national laws.
The OJEU has published the Directive (EC) 2022/2041 of the European Parliament and of the Council of 19 October 2022 on adequate minimum wages in the European Union. The aim of this directive is to improve the living and working conditions of workers in the EU, in particular in relation to the adequacy of minimum wages, with a view to contributing to upward social convergence and reducing wage inequality. The rule applies to all employees in the EU with an employment contract or a labor relationship in force in a Member State.
First of all, regarding the adequacy of statutory minimum wages with respect to the Member States in which they exist, the directive establishes the necessary procedures for the setting and updating of such wages guided by clear criteria, with the aim of achieving a decent standard of living, reducing poverty, promoting cohesion and upward social convergence andreducing the gender pay gap.
Member States will define those criteria in accordance with their national practices in the national law in question, in decisions of their competent bodies or in tripartite agreements. The criteria must be clear and include, at least, the following: a) the purchasing power of statutory minimum wages, considering the cost of living; b) the general level of wages and their distribution; c) the growth rate of wages and d) long-term national productivity levels and developments. However, since the directive does not establish a specific minimum wage that the Member States should achieve, it continues to be an independent decision of each State.
Furthermore, the text sets out the duty of the Member States to ensure that regular and timely updates of statutory minimum wages take place at least every two years (or at least every four for Member States which use an automatic indexation mechanism).
Secondly, in relation to the promotion of collective bargaining, the directive provides for a series of actions to increase the number of workers covered by collective bargaining and facilitate the exercise of the right in this connection, such as: i) to promote the building and strengthening of the capacity of the social partners, ii) to encourage constructive, meaningful and informed negotiation, and/or iii) to take measures to protect the right to collective bargaining of acts of discrimination.
In this regard, it establishes that each Member State with a collective bargaining coverage below a threshold of 80% should establish a framework of enabling conditions for collective bargaining and an action plan. The action plan should set out a clear timeline and concrete measures to progressively increase the rate of collective bargaining coverage.
It also establishes that Member States must take the necessary measures to involve the social partners in the setting and updating of statutory minimum wages in a timely and effective manner.
Finally, the directive states that the Member States must take steps to improve the effective access of workers to statutory minimum wages. These include effective controls by labor inspectorates, easily accessible information on minimum wage protection and the development of the capability of the enforcement authorities to pursue non-compliant employers.
It also calls on the Member States to ensure that information regarding statutory minimum wages as well as minimum wage protection provided for in universally applicable collective agreements, including information on redress mechanisms, is publicly available in a comprehensive and easily accessible way, including to persons with disabilities.
It also envisages the obligation by the Member States to ensure that workers (including those whose employment relationship has ended) have access to effective dispute resolution. It also establishes the obligation for Member States to take the necessary measures to protect workers and workers’ representatives from any adverse treatment. In this regard, the Member States must lay down the rules on penalties applicable to infringements of rights and obligations falling within the scope of this directive, where those rights and obligations are provided for in national law or collective agreements.
The Law will enter into force twenty days after its publication. However, it provides that Member States must adopt the measures necessary to comply with this directive by November 15, 2024.