The Commission launches the second-stage consultation of European trade unions and employers’ organisations on how to ensure fair minimum wages for all workers in the European Union.
This follows the first-stage consultation which was open from 14 January to 25 February 2020, to which the Commission received replies from 23 EU-wide social partners.Based on the replies received, the Commission concluded that there is a need for further EU action. Already a political priority for the von der Leyen Commission, recent events have further cemented demand for EU efforts to reduce rising wage inequalities and in-work poverty.
Minimum wages and Covid-19
The EU has been particularly hit by the coronavirus pandemic, with negative effects on Member States’ economies, businesses, and the income of workers and their families. Ensuring that all workers in the EU earn a decent living is essential for the recovery as well as for building fair and resilient economies, and minimum wages have an important role to play.Minimum wages are relevant both in countries relying solely on collectively agreed wage floors and in those with a statutory minimum wage.
Minimum wages that are appropriately negotiated with social partners, complied with and updated can:
- Provide vulnerable workers with a financial buffer in case of hard times
- Create greater incentives to work, thereby improving productivity
- Reduce wage inequalities in society
- Increase domestic demand, and the resilience of the economy
- Help close the gender pay gap
The Commission does not aim to set a uniform European minimum wage, nor to harmonise minimum wage setting systems. Any possible measure would be applied differently depending on the minimum wage setting systems and traditions of the Member State, in full respect of national competencies and social partners’ contractual freedom.
The second-stage consultation document sets out possible avenues for EU action to ensure that minimum wages are set at adequate levels and protect all workers.
Social partners are invited to respond to the questions in the consultation by 4 September 2020. This includes what sort of instrument would be most appropriate. The Commission is considering both legislative and non-legislative instruments, i.e. a Directive in the area of working conditions, and a Council Recommendation.
The next step to this second stage consultation is either negotiations between social partners with a view to concluding an agreement under Article 155 of the Treaty on the Functioning of the EU (TFEU) or the presentation of a proposal by the European Commission.