Minimum wage standards are to be harmonized across the EU. According to a legislative proposal, EU countries will then have to update their minimum wage every two years.

The EU states and the European Parliament have agreed on uniform standards for minimum wages in the European Union. According to the chief negotiator in the European Parliament, Dennis Radtke (CDU), the compromise includes standards on how statutory minimum wages are to be set, updated and enforced. In addition, the proposed law stipulates that EU countries must define action plans to increase collective bargaining coverage if the rate is below 80 percent, the MP confirmed to the German Press Agency on Tuesday. The lives of millions of employees will improve significantly.

Minimum wages are to be adjusted across the EU every two years

The EU countries announced that statutory minimum wages should be updated at least every two years in the future. There is an exception for countries that use an automatic indexing mechanism. A period of four years applies here. The social partners, such as trade unions and employers’ associations, must be involved in the procedures for setting and updating minimum wages.

Both sides have yet to formally confirm the compromise. Then the EU countries have two years to transpose the directive into national law.

Minimum wage in Germany rises to 12 euros

In Germany it was recently decided that the minimum wage should rise to twelve euros from October 1st. Germany already has one of the highest minimum wages in the EU. Only in Luxembourg is more paid, according to information from the Federal Statistical Office and the Federal Ministry of Labor. However, the rate of collective bargaining coverage in the Federal Republic is well below the 80 percent that is now being aimed for.

In October 2020, the EU Commission had already proposed a draft law. With the agreement that has now been reached, there was the challenge that the EU treaties set narrow limits – because the European Union is not allowed to set specific wage levels, but only to issue guidelines.