European states establish common rules on minimum wages - Trends-Tendances - economic news in real time.

European states establish common rules on minimum wages – Trends-Tendances – economic news in real time.

The European Parliament voted this week in favor of establishing common rules on the level of minimum wages in Europe. This will lead to a general increase in the latter in the Member States.

This week, the European Parliament adopted new legislation on “adequate” minimum wages applicable in the Member States of the European Union. Legislation passed with 505 votes for, 92 against and 44 abstentions.

This week, the European Parliament adopted new legislation on “adequate” minimum wages applicable in the Member States of the European Union. Legislation adopted with 505 votes for, 92 against and 44 abstentions. For the European Union, these new measures aim to “improve the standard of living and working conditions of all European workers”. And who says improvement in the standard of living says better remuneration. With this in mind, the EU has therefore established “minimum requirements” concerning the legal minimum wages practiced in Europe. In the European Union, minimum wages are highest in Luxembourg, Ireland and Germany. They are lowest in Bulgaria, Latvia and Estonia. While there is a statutory minimum wage in 21 out of 27 countries, the remaining six – Austria, Cyprus, Denmark, Finland, Italy and Sweden – have opted to determine wage levels through collective bargaining . That is to say a negotiation between the staff representatives and the employer, at the level of a company or a branch of activity. Little wonder then that this directive has been criticized by Denmark and Sweden. However, nothing will really change for the latter since the directive will not oblige them to implement a legal minimum wage. Only the Member States which already have one will therefore have to ensure that it is “suitable”. “allow workers to live decently” and above all, “taking into account the cost of living and the different levels of remuneration”. This means that the minimum wage will have to follow the curve of inflation, for example. In order to assess the level of their legal minimum wage, each State will have to take as an adequacy value 60% of the gross median wage and 50% of the gross average wage. Applied to the minimum wage in European countries, which is in most cases below this ratio, this means that minimum wages could be increased in the years to come. The other important rule to remember is that collective bargaining at the sectoral and cross-industry level is considered “essential” by the directive, in order to “achieve an adequate level of protection offered by minimum wages. It must therefore be encouraged and reinforced.” In countries where less than 80% of workers are covered by collective bargaining, Member States, in collaboration with the social partners, will have to establish an action plan in order to increase this coverage. The application of the directive will be monitored , since each Member State will have to put in place a control system, including reliable monitoring as well as on-the-spot checks and inspections. This is in order to fight against abusive subcontracting, bogus self-employment, undeclared overtime or increased work intensity. The Council of the European Union – i.e. the ministers of each Member State – should officially approve the agreement in September. European countries will then have two years to comply with the directive.Aurore Dessaigne

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