Commission launches consultation on fair minimum wages

The Commission launched on Wednesday the second-stage consultation of European trade unions and employers' organisations on how to ensure fair minimum wages for all workers in the EU. The move follows a first-stage consultation earlier this year to which the Commission received replies from 23 EU-wide social partners, the EU press service reported.

Based on the replies, the Commission concludes there is a need for further EU action. It also believes recent events have further cemented demand for EU efforts to reduce rising wage inequalities and in-work poverty. 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.

“As we work towards inclusive recovery from the coronavirus crisis, we want to make sure that all workers in the EU are protected by a fair minimum wage, allowing them to earn a decent living wherever they work,” EC VP Valdis Dombrovskis said. “Social partners play a crucial part in negotiating wages nationally and locally, and should be involved is setting minimum wages both in countries relying solely on collectively agreed wage floors and in those with a statutory minimum wage.”

The EU executive believes that ensuring that all workers in the EU earn a decent living will help recovery and build fair and resilient economies. Minimum wages are seen as relevant both in countries relying solely on collectively agreed wage floors and in those with a statutory minimum wage. When set at adequate levels and taking into account economic conditions, minimum wages support vulnerable workers and help to preserve both employment and the competitiveness of firms.

The Commission stresses that its aim is not 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. Collective bargaining has a critical role to play, as underlined by social partners' replies to the first-stage consultation.

Therefore, the EU initiative would aim to ensure that well-functioning collective bargaining in wage-setting is in place; national frameworks allow for statutory minimum wages to be set and regularly updated according to clear and stable criteria; social partners are effectively involved in statutory minimum wage setting to support minimum wage adequacy; minimum wage variations and exemptions are eliminated or limited; and national minimum wage frameworks are effectively complied with and monitoring mechanisms are in place.

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.

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