Under new rules, EU countries must measure if minimum wage allows ‘decent standard of living’.
EU institutions have agreed on EU-wide rules for minimum wages, the European Parliament announced on Tuesday.
Negotiators of EU legislators, the EP, and the Council of the European Union struck a deal late Monday night on new EU rules to set adequate minimum wages, the EP said in a press statement.
Under the new rules, EU countries have to measure if the existing lowest wage permitted by law can provide a “decent standard of living, taking into account their own socio-economic conditions, purchasing power or the long-term national productivity levels and developments.”
To make this assessment, the national governments have to compose a basket of goods and services.
Indicators such as 60% of the gross median wage or 50% of gross average wage can also be taken into consideration.
The new legislation should apply to all workers who have an employment contract or relationship in the EU but is not mandatory for countries where the minimum wage is exclusively protected by a collective bargaining agreement.
The new EU law also obliges EU states where fewer than 80% of workers are protected by collective agreement to set up a national action plan in support of sectoral and cross-industry bargaining rights.
The EU will also set up a system to monitor and enforce the EU legislation on minimum wages.
Ursula von der Leyen, European Commission president, first proposed setting EU-wide standards for the minimum wage in October 2020.
“The EU has delivered on its promise,” she said, hailing the new agreement.
“The new rules on minimum wages will protect the dignity of work and make sure that work pays,” she added.
Following the deal, EU legislators have yet to officially adopt the bill.