Questions & answers: Adequate minimum wages in the EU

What is the Directive on minimum wages about?

The Directive on adequate minimum wages sets out rules that should ensure that workers earn adequate minimum wages, improving social fairness in the EU.
To achieve this goal, the Directive creates a framework to improve the adequacy of minimum wages and to make sure that more workers are protected by minimum wages. It does not establish a common minimum wage level across all EU countries, and it does not mean that all Member States have to introduce a statutory minimum wage.
More specifically, the Directive aims to:
1. ensure that the procedure for setting and updating statutory minimum wages contributes to their adequacy,
2. promote collective bargaining on wages, and
3. enhance the access of workers to both statutory minimum wages and minimum wages agreed in collective agreements.

This all happens in full respect of Member States’ competences and the freedom of social partners.

When set at adequate levels, minimum wages improve social fairness, help to sustain domestic demand, and strengthen incentives to work. They create leeway for wider social and economic benefits.
The Directive will help protect the wages of vulnerable workers and reduce in-work poverty, social exclusion, and wage inequality.
Furthermore, adequate minimum wages also help to reduce the gender pay gap, making the EU’s labour markets more fair, equal, and competitive.
The Directive implements the right to fair wages that provide for a decent standard of living, and to adequate minimum wages, enshrined in the Pillar of Social Rights, which all Member States have endorsed.

The Directive aims to improve the coverage of minimum wages and to enhance the effective access of workers to them. However, it does not create a right to a minimum wage.
It ensures that the procedure followed by Member States for setting and updating statutory minimum wages contributes to their adequacy.
This includes conducting regular and timely updates based on clear criteria and in consultation with social partners on necessary changes.
In addition, all Member States must facilitate the exercise of the right of workers and employers to collective bargaining on wages. In particular, they should:
- encourage fair and meaningful wage negotiations,
- protect workers and trade unions from negative consequences of participating in collective bargaining, and
- safeguard both trade unions and employers' organisations from interference.
Member States, where less than 80% of workers are covered by collective agreements, must establish an action plan to promote collective bargaining.

The Directive will benefit both employers and employees.
It aims to ensure adequate minimum wage protection for all 182 million workers in Europe.
Helping to establish a common baseline for all workers, the Directive will in particular benefit women and minority groups, who often earn low wages. This helps to create a more fair and balanced working environment and an inclusive society.
The Directive also benefits trade unions as it establishes conditions for fair and transparent negotiations and protects union members against negative consequences.
Finally, the Directive will also benefit employers. A common minimum wage reduces uncertainty about future labour costs, and it improves wage-setting frameworks. This supports fair competition in the market and levels the playing field between companies.

Member States were required to incorporate the Directive into their national law by 15 November 2024.
After this deadline, the Commission assesses whether each Member State has incorporated the Directive into national law in a complete and correct way. It will take action if and when necessary. Concretely, the Commission can start an infringement procedure against those countries who have not (fully), or only inadequately, implemented the Directive.
The Commission does not control if employers comply with national minimum wage laws. This is up to Member States.
Member States are required to report data and actively monitor minimum wage protection. They should also analyse the development of collective bargaining coverage.
The Commission will also evaluate the Directive after five years.

The Directive does not create a right of workers to be paid a minimum wage. It sets out the minimum requirements and procedural obligations that Member States must respect when setting and updating statutory minimum wages. It is then up to Member States to implement the rules and ensure that employers respect them.
Where the national rules on minimum wages are not respected by an employer, an employee should file a complaint before the competent national authorities.
Where you suspect that the national rules in a Member State regarding minimum wages do not, or only inadequately, implement the Directive, you can file a complaint before the Commission. Again: this procedure does not apply if national rules are not respected, for instance if an employer does not the pay their employees according to the national minimum wage.
Following a complaint alleging a breach of EU law by a Member State, or on its own initiative, the Commission can start an infringement procedure against the country in question.

In countries with a statutory minimum wage, social partners will have to be effectively involved in the entire process of setting and updating the statutory minimum wage.
In all Member States, they will also have to be effectively involved in the measures taken to implement the Directive, including – in countries where less than 80% of employees are covered by collective agreements –in the action plans to promote collective bargaining.
Additionally, a Member State can decide to entrust the national social partners with implementing the Directive, at their joint request.