February 9, 2023

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European Parliament approves a new minimum wage framework |  Economie

European Parliament approves a new minimum wage framework | Economie

In Strasbourg, the European Parliament ratified the new EU minimum wage framework. The new regulations oblige national governments to check whether their country’s minimum wage also guarantees decent living conditions and encourage collective wage bargaining.

Minimum wage setting remains a national prerogative, but from now on Member States must check whether the legal minimum wage is sufficient. They can compare wages to a basket of goods and services, but they can also test them against reference values. For example, the pay must be at least 50% of the average gross wage and 60% of the average gross wage.

According to Kathleen van Brebbett (Vorwett), 17 of the 27 member states do not meet the reference values, including Belgium. “In Belgium, the minimum wage is 39.7 percent of the average gross wage and 46.6 percent of the average gross wage. For the lowest wages in our country, this means an increase from 10.89 euros an hour to 12 euros an hour, or About 2,000 euros a month, according to Van Brempt.

The agreement states that member states must update the legal minimum wage at least every two years. An exception is provided for countries like Belgium, which work with automatic indexing. They only need to be updated every four years.

Significant increase in employee wages in Poland and Hungary

Additionally, the new directive places a strong emphasis on collective wage negotiations. In fact, research shows that countries with a tradition of collective bargaining tend to have fewer workers with lower wages and higher minimum wages. This is why the directive obligates the national government to draw up a plan of action with the social partners if less than 80 per cent of the workers are protected through collective bargaining.

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Austria, Cyprus, Denmark, Finland, Italy, and Sweden do not have a legal minimum wage and only set wages through these negotiations. They can keep it that way. Also in Belgium, more than 80 percent of employees are already covered. This proposal essentially encourages other member states to start collective consultations on wages with the social partners, just like Belgium. In addition, member states that have many workers working on minimum wages, such as Poland, Hungary or Romania, will now see a significant rise in their wages”, says Sarah Mathieu (Gruen).

Two years

The European Parliament had already reached an agreement with member states on the new regulations before the summer recess. This compromise has now been approved in Strasbourg by 505 votes to 92, with 44 abstentions. Member states are also expected to give the green light soon. They will then be given two years to change the provisions of the directive. In reaction, Federal Labor Minister Pierre-Yves Dermann (PS) has already stated that he will monitor the speed.

The call for a European initiative on minimum wages was an important topic in the European election campaign of 2019. A year later, the European Commission put forward a proposal. “The approval could not have come at a better time. With ever-rising energy prices and the cost of living affecting millions of Europeans, an adequate minimum wage is more important than ever,” Commissioner-in-Charge Nicolas Schmidt welcomed the vote.