Draft law on joint standards for minimum wages in EU passes crucial hurdle

BRUSSELS (Reuters) – The European Union on Tuesday reached a breakthrough on common rules for minimum wages across the 27-nation bloc with a provisional agreement on measures designed to promote collective bargaining and better enforce existing minimum wages.

The European Parliament and the European Council, grouping the bloc’s member states, said their negotiators overnight struck the provisional deal which still has to be confirmed by formal votes in both institutions.

In October 2020, the European Commission had set the stage for the negotiations with a proposal that lays out common rules for a minimum wage, but not a minimum wage level itself.

The head of the EU’s executive Commission, Ursula von der Leyen, welcomed the agreement on the draft law that is meant to reduce wage inequality and in-work poverty.

“The EU has delivered on its promise. The new rules on minimum wages will protect the dignity of work and make sure that work pays,” she said in a statement.

The agreement means EU countries will have to assess if their existing statutory minimum wages are sufficient to ensure a decent standard of living, the European Parliament said.

Countries where less than 80% of workers are covered by collective bargaining should establish an action plan with a clear time line and concrete measures to extend this kind of wage setting, statements by the Council and Parliament said.

The agreement also introduces the obligation for EU countries to set up an enforcement system, including reliable monitoring, controls and field inspections to address abusive subcontracting, bogus self-employment and non-recorded overtime, the European Parliament said.

The deal still needs to be confirmed by formal votes both in the Council and the European Parliament, with EU countries then having two years to implement the EU rules into national law.

Of the EU’s 27 countries, six have wages set in collective bargaining between employers and trade unions and 21 have statutory minimum wages set by governments.

(Reporting by Sabine Siebold, editing by Ed Osmond)