With a deal struck on Monday night, Parliament and Council negotiators agreed on EU rules to set adequate minimum wages, as provided by national law and/or collective agreements. The new legislation will apply to all EU workers who have an employment contract or employment relationship. The EU countries in which the minimum wage is protected exclusively via collective agreements will not be obliged to introduce it nor to make these agreements universally applicable.

Adequate wages

According to the agreement, member states will have to assess whether their existing statutory minimum wages (i.e. the lowest wage permitted by law) are adequate to ensure a decent standard of living, taking into account their own socio-economic conditions, purchasing power or the long-term national productivity levels and developments.

For the adequacy assessment, EU countries may establish a basket of goods and services at real prices. Member states may also apply indicative reference values commonly used internationally, such as 60% of the gross median wage and 50% of the gross average wage.

Deductions from or variations to the minimum wage will have to be non-discriminatory, proportionate and have a legitimate objective, such as the recovery of overstated amounts paid or deductions ordered by a judicial or administrative authority.

Collective bargaining

EU negotiators agreed that EU countries will have to strengthen sectoral and cross-industry collective bargaining as an essential factor…