07.12.2022
WHAT IS AN ADEQUATE MINIMUM WAGE
After the successful completion of the inter-institutional meetings in the summer and the final vote of approval by the European Parliament (voting in the Plenary session on 14.09.2022) and the Council of the European Union (on 04.10.2022), the final text of the Directive on adequate minimum wages in the European Union. Under what conditions will the normative act be applied and to whom does it apply?
During the almost two-year period of negotiations on the Directive, started by the Commission on October 28, 2020, the two co-legislative institutions made substantial changes to the initial version of the normative act. The corrected texts generally upgrade the Commission's vision regarding the process of determining and updating the statutory minimum wages in the member states of the European Union, including Bulgaria, but are also expected to facilitate the collective bargaining process in the European countries.
The applicability of the normative document will apply to all workers and employees who have an employment contract or are in an employment relationship. Attempts to exclude certain groups (such as maritime workers) from the scope of the Directive have thus been effectively thwarted.
In the adopted Directive, the concept of "living wage" failed to establish itself as a reference value to be taken into account for assessing the purchasing power of the minimum wage. However, Member States should take "living standards" into account when setting or updating the minimum wage.
Among the other mandatory criteria that should be taken into account are the general level of wages and their distribution, the growth rate of wages, the long-term tracked national productivity levels and their development. That is why each country can define other criteria that correspond to its socio-economic context, to be formulated together with the social partners.
The pitfall that may hinder the effective enforcement of the "living wage" as a guide to the necessary funds that the minimum wage should provide is the express entry in the Directive according to which States are entitled to assign a different relative weight to each of the criteria, used to determine or update the minimum wage.
The request of trade unions across Europe to assess the adequacy of statutory minimum wages by relating them as 60% of the gross median wage and 50% of the gross average wage (covering the so-called double threshold) was achieved through a specific entry in the Directive. In this way, the ratio is recognized as an important reference for the States, despite the pressure of the Council to write it only in the recitals of the Directive. The place of the social partners should certainly be emphasized in the selection of the indicative reference values for assessing the adequacy of the statutory minimum wages.
Reference:
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on adequate minimum wages in the European Union
