Minimum wages, EU directive approved
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The Council of the EU gave the final green light to the directive on adequate minimum wages, which was approved on 14.9.22 by the European Parliament. (1)
Minimum wages, the aims of the directive
The first goal and of "contribute to upward social convergence", That is, to increase wages and reduce"pay inequalities". (Art. 1)
Minimum wages therefore, they must be "adequate" in order to achieve "decent living and working conditions".
The directive recallsfurthermore, further purposes, such as the promotion of the "social cohesion"And the reduction of"gender pay gap".
Scope of
The "applies to Union workers who have an employment contract or employment relationship as defined by law, collective agreements or practices in force in each Member State, taking into account the case law of the Court of Justice of the European Union". (Art. 2)
The broad wording allows you to also include those workers who are on the borders of subordination, the so-called "workers". The provision of Recital 17 states that "Domestic workers, on-call workers, intermittent workers, voucher workers, bogus self-employed workers, digital platform workers, trainees and apprentices could fall within the scope of this Directive provided they meet these criteria".
The same Recital specifies that "the determination of the existence of an employment relationship should be based on the facts related to the actual work performance and not on the way in which the parties describe the relationship".
What the Directive provides
The provides for an adequate minimum wage, whether this is determined by collective bargaining or by law.
The EU it has no competence in setting the level of minimum wages (art. 153, par. 5 TFEU Treaty on the Functioning of the European Union), therefore it will be up to the Member States to do so by law and by collective agreements or both.
For this purpose the Directive indicates two paths:
- one common to all Member States, based on the promotion of collective bargaining, in order to increase coverage levels, (2)
- an altro for those Member States with a legal minimum wage, they will be required to apply some shared criteria which, while leaving the necessary room for maneuver to national governments, will favor the achievement of “adequate” wage levels.
Intervention proposals to ensure the adequacy of the minimum wage
Promotion of collective bargaining on wage setting (Art. 4)
The states they will have to:
- take measures to promote the capacity of the social partners to participate in collective bargaining on wage setting
- encourage constructive, meaningful and informed wage negotiations between the social partners
- examine any critical issues affecting specific sectors or areas
- where the coverage level is below the 70% threshold, the Member States in which this occurs will have to “provide for a framework of conditions favorable to collective bargaining”. These conditions will be identified "by law following consultation with the social partners or through an agreement with the latter", thus defining an action plan to be communicated to the Commission and over which the Commission will be able to exercise control.
Legal minimum wage
Member States where a statutory minimum wage regime already operates, they will have to:
- define clear and stable national criteria for determining and periodically updating the minimum wage, which take into account the purchasing power of minimum wages in relation to the cost of living, the general level of gross wages and their distribution, the growth in gross wages and the trend in labor productivity. (Art. 5)
- protect statutory minimum wages from unjustified or disproportionate deductions. (Art. 6)
- involve the social partners in the determination and updating of legal minimum wages, including through the establishment of specific advisory bodies. (Art. 7)
- strengthen the system of controls and inspections in the field, provide guidance to enforcement authorities and provide workers with adequate information on minimum wages, in order to promote effective access to statutory minimum wages. (Art. 8)
- In the execution of public procurement and concession contracts, direct economic operators and the subsequent subcontracting chain are required to comply with the wages established by collective bargaining and with the statutory minimum wages, if any. (Art. 9)
- develop effective and reliable data collection and monitoring tools to enable Member States to report relevant coverage and adequacy data to the Commission annually. (Art. 10)
- guarantee workers and their representatives access to effective and impartial dispute resolution, the right of redress, including the right to adequate compensation, and effective protection from any form of prejudice if they decide to exercise the right of defense of their rights relating to the protection guaranteed by the minimum wage in force. (Art. 11)
- provide for effective, proportionate and dissuasive penalties in the event of violations of the national provisions establishing the protection guaranteed by the minimum wage. (Art. 12)
Next steps
The it will enter into force on the twentieth day following its publication in the Official Journal of the European Union and member states will have two years to transpose it.
Conclusions
The represents an important novelty in the social policies of the European Union and a necessary impetus for a reform of the mechanisms for determining minimum wages at the national level.
It will now be up to the individual states members and the social partners take the necessary measures to ensure compliance with the requirements of the Directive, taking into account their respective national economic circumstances and the specificities of their respective minimum wage systems.
Note
(1) https://eur-lex.europa.eu/legal-content/IT/TXT/PDF/?uri=CELEX:52020PC0682
(2) for "coverage level", Art. 2 means "the percentage of workers nationwide to whom a collective agreement applies".
Attorney at law in Milan and Frankfurt am Main. An expert in family, juvenile and criminal law, she is now enrolled in a university master's degree in food law
