Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on adequate minimum wages in the European Union
Date: 2020-10-28
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: EU Member State, EU employment policy, collective agreement, collective bargaining, labour law, living conditions, minimum pay, standard of living, wage determination, working conditions

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   EUROPEAN COMMISSION  Brussels, 28.10.2020  COM(2020) 682 final 2020/0310 (COD)  Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on adequate minimum wages in the European Union {SEC(2020) 362 final} - {SWD(2020) 245 final} - {SWD(2020) 246 final}  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Ensuring  that  workers  in  the  Union  earn  adequate  wages  is  essential  to  guarantee  adequate 
working and living conditions, as well as to build fair and resilient economies and societies in 
line with  the  United  Nations 2030 Agenda for Sustainable Development  and  its Sustainable 
Development Goals. Adequate wages are an essential component of the EU model of a social 
market economy. Convergence across Member States in this area contributes to the promise 
of shared prosperity in the Union.  

In November 2017, the European Parliament, the Council and the Commission proclaimed the 
European  Pillar  of  Social  Rights  (hereafter  the  Pillar)  to  deliver  on  Europe’s  promise  of 
prosperity, progress and convergence, and make social Europe a reality for all. Principle 6 of 
the  Pillar  on  ‘Wages’  calls  for  adequate  minimum  wages  as  well  as  for  transparent  and 
predictable wage setting to be put in place, according to national practices and respecting the 
autonomy of the social partners. The Strategic Agenda for 2019-2024, agreed at the European 
Council in June 2019, called on the implementation of the Pillar at EU and national level. 

The  Political  Guidelines  for  the  Commission  2019-2024  announced  an  Action  Plan  to  fully 
implement the Pillar, including an initiative on fair minimum wages. The Communication of 
14 January 2020 on “Building a Strong Social Europe for Just Transitions”1 set out a roadmap 
for  the  preparation  of  the  Action  Plan  and  confirmed  the  commitment  to  an  initiative  on 
minimum wages among the key actions to be pursued at EU level in this context. A first-stage 
consultation of the social partners on how to ensure adequate minimum wages for workers in 
the Union was launched on the same day2. 

In  her  State  of  the  Union  address  of  September  2020,  President  von  der  Leyen  stated  that: 
“The  truth  is  that  for  too  many  people,  work  no  longer  pays.  Dumping  wages  destroys  the 
dignity  of  work,  penalises  the  entrepreneur  who  pays  decent  wages  and  distorts  fair 
competition  in  the  Single  Market.  This  is  why  the  Commission  will  put  forward  a  legal 
proposal to support Member States to set up a framework for minimum wages. Everyone must 
have  access  to  minimum  wages  either  through  collective  agreements  or  through  statutory 
minimum wages.”  

Better  working  and  living  conditions,  including  through  adequate  minimum  wages,  benefit 
both workers and businesses in the Union. Addressing large differences in the coverage and 
adequacy of minimum wages contributes to improving the fairness of the EU labour market, 
to  stimulating  productivity  improvements  and  to  promoting  economic  and  social  progress. 
Competition  in  the  Single  Market  should  be  based  on  innovation  and  productivity 
improvements, as well as on high social standards.  

In  recent  decades,  low  wages  have  not  kept  up  with  other  wages  in  many  Member  States. 
Structural trends reshaping labour markets such as globalisation, digitalisation and the rise in 
non-standard  forms  of  work,  especially  in  the  service  sector,  have  led  to  an  increased  job 
polarisation resulting in turn in an increasing share of low-paid and low-skilled occupations, 

1  Commission Communication, Building a Strong Social Europe for Just Transitions, COM(2020) 14 final 
2  Consultation document, First phase consultation of the Social Partners under Article 154 TFEU on a possible 

action addressing the challenges related to fair minimum wages, C(2020) 83 final. 

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and have contributed to an erosion of traditional collective bargaining structures. This has led 
to more in-work poverty and wage inequality. 

The role of minimum wages becomes even more important during economic downturns. The 
Covid-19 crisis has particularly hit sectors with a higher share of low-wage workers such as 
retail  and  tourism  and  has  had  a  stronger  impact  on  the  disadvantaged  groups  of  the 
population. Ensuring workers in the Union have access to employment opportunities, and to 
adequate  minimum  wages  is  essential  to  support  a  sustainable  and  inclusive  economic 
recovery. 

Minimum  wage  protection  can  be  provided  by  collective  agreements  (as  is  the  case  in  6 
Member  States)  or  by  statutory  minimum  wages  set  by  law  (as  is  the  case  in  21  Member 
States).  

When set at adequate levels, minimum wage protection ensures a decent living for workers, 
helps sustain domestic demand, strengthens incentives to work, and reduces in-work poverty 
and  inequality  at  the  lower  end  of  the  wage  distribution.  Minimum  wage  protection  also 
supports gender equality, since more women than men earn wages at or around the minimum 
wage.  

However, many workers are currently not protected by adequate minimum wages in the EU.  

In  the  majority of Member States with national statutory minimum  wages,  minimum wages 
are too low vis-à-vis other wages or to provide a decent living, even if they have increased in 
recent  years.  National  statutory  minimum  wages3  are  lower  than  60%  of  the  gross  median 
wage  and/or  50%  of  the  gross  average  wage  in  almost  all  Member  States4.  In  2018,  the 
statutory minimum wage did not provide sufficient income for a single minimum-wage earner 
to reach the at-risk-of-poverty threshold in nine Member States. In addition, specific groups of 
workers  are  excluded  from  the  protection  of  national  statutory  minimum  wages.  Member 
States  with  a  high  collective  bargaining  coverage  tend  to  have  a  low  share  of  low-wage 
workers  and  high  minimum  wages.  However,  also  in  Member  States  relying  exclusively  on 
collective  bargaining,  some  workers  do  not  have  access  to  minimum  wage  protection.  The 
share  of  workers  not  covered  is  between  10%  and  20%  in  four  countries,  and  55%  in  one 
country.  

Against this background, the proposed Directive aims to ensure that the workers in the Union 
are protected by adequate minimum wages allowing for a decent living wherever they work. 
In order to reach this general objective, the proposal establishes a framework to improve the 
adequacy  of  minimum  wages  and  to  increase  the  access  of  workers  to  minimum  wage 
protection.  These  objectives  are  relevant  both  for  statutory  minimum  wage  systems  and  for 
those  relying  on  collective  bargaining.  The  proposed  Directive  is  designed  to  achieve  these 
objectives while taking into account and fully respecting the specificities of national systems, 
national competencies, social partners’ autonomy and contractual freedom. It is also designed 
in  such  a  way  to  safeguard  access  to  employment  and  take  into  account  the  effects  on  job 
creation and competitiveness, including for SMEs. It provides sufficient flexibility to take into 
account social and economic developments, including productivity and employment trends. 

In  order  to  reach  these  objectives,  the  proposed  Directive  aims  at  promoting  collective 
bargaining on wages in all Member States. Collective bargaining plays a key role for adequate 

3  The indicators and related reference values refer to monthly minimum wages.  
4  Adequacy indicators commonly used at international level, e.g. the Kaitz index, compare the minimum wage to 
the  median  wage  or  the  average  wage.  In  addition,  a  standard  of  decent  living  defined  by  the  Council  of 
Europe’s compares the net minimum wage to the net average wage. 

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minimum  wage  protection.  The  countries  with  high  collective  bargaining  coverage  tend  to 
display  a  lower  share  of  low-wage  workers,  higher  minimum  wages  relative  to  the  median 
wage, lower wage inequality and higher wages than the others. In the Member States where 
minimum wage protection is exclusively provided by collective agreements, its adequacy and 
the share of workers protected are directly determined by the features and functioning of the 
collective  bargaining  system.  In  Member  States  with  statutory  minimum  wages,  collective 
bargaining  has  also a  strong effect on  minimum wage adequacy.  By affecting  general wage 
developments, collective bargaining ensures wages above the minimum level set by law and 
induces improvements in the latter. It also pushes increases in productivity. 

For  the  countries  where  statutory  minimum  wages  exist,  the  proposed  Directive  aims  at 
ensuring that Member States put in place the conditions for statutory minimum wages to be 
set at adequate levels, while taking into account socio-economic conditions as well as regional 
and sectoral differences. Criteria, defined in a clear and stable way and aiming at promoting 
adequacy,  together  with  a  governance  framework  providing  for  regular  and  timely  updates 
and  for  an  effective  involvement  of  the  social  partners,  help  ensure  adequacy  of  statutory 
minimum  wages.  The  proposed  Directive  also  aims  at  achieving  further  improvements  in 
adequacy by limiting to a minimum the application of variations of statutory minimum wage 
rates for specific groups of workers or of deductions from the remuneration. 

Finally,  workers  may  not  be  adequately  protected  by  minimum  wages  due  to  lack  of 
compliance  with  the  existing  collective  agreements  or  national  legal  provisions.  Ensuring 
compliance and effective enforcement is essential for workers to benefit from effective access 
to  minimum  wage  protection  and  businesses  to  be  protected  from  unfair  competition. 
Therefore,  the  proposed  Directive  aims  at  promoting  compliance  as  well  as  strengthening 
enforcement and monitoring in all Member States in a proportionate way, so it does not create 
excessive and  disproportionate administrative  burden for Union businesses, including small, 
medium-size and micro enterprises. 

Consistency with existing policy provisions in the policy area 

• 
Guideline 5 of Council Decision (EU) 2020/1512/EU5 calls on Member States, including those 
with national statutory minimum wages, to ensure an effective involvement of social partners in 
wage setting, providing for fair wages that enable a decent standard of living and allowing for an 
adequate  responsiveness  of  wages  to  productivity  developments,  with  a  view  to  upward 
convergence.  The  Guideline  also  calls  on  Member  States  to  promote  social  dialogue  and 
collective  bargaining  on  wage  setting.  It  also  calls  on  Member  States  and  social  partners  to 
ensure  that  all  workers  have  adequate  and  fair  wages  by  benefitting  from  collective 
agreements  or  adequate  statutory  minimum  wages,  and  taking  into  account  their  impact  on 
competitiveness,  job  creation  and  in-work  poverty.  The  general  aim  of  the  proposal  is  to 
ensure  that  the  workers  in  the  Union  are  protected  by  adequate  minimum  wages.  Its  goals 
include the promotion of collective bargaining, supporting the involvement of social partners, 
and  the  establishment  of  clear  and  stable  criteria,  that  support  statutory  minimum  wage 
adequacy.  
Directive  2019/1152/EU6  calls  for  informing  workers  of  the  essential  aspects  of  their  jobs 
including  remuneration.  The  proposed  Directive  provides  for  Member  States  to  define  clear 
and stable criteria, ensure regular and timely updates of statutory minimum wages, as well as 

5  Council  Decision  (EU)  2020/1512/EU  of  13  October  2020  on  guidelines  for  the  employment  policies  of  the 

Member States. 

6  Directive (EU) 2019/1152/EU of the European Parliament and the Council of 20 June 2019 on transparent and 

predictable working conditions in the European Union. 

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an  effective  involvement  of  the  social  partners,  hence  making  developments  in  statutory 
minimum wage more transparent.  
Directive 2014/67/EU7 provides for improving the access to information for posted workers, 
in particular, by putting in place single official national websites on posting. It also requires, 
that the relevant information covers the different minimum rates of pay and their constituent 
elements in case terms and conditions of employment are laid down in collective agreements 
in accordance with Directive 96/71. Directive 2014/67/EU also provides for a sub-contracting 
liability  mechanism  to  be  set  up  covering  at  least  the  construction  sector  and  the  minimum 
rates of pay. Easy access to information on the statutory minimum rates of pay as foreseen in 
Directive  2014/67/EU  supports  the  objectives  of  this  proposal,  namely  to  ensure  adequate 
minimum wage protection in the EU. By strengthening the enforcement of statutory minimum 
wage  frameworks,  supporting  the  development  of  reliable  monitoring  and  data  collection 
systems  and  by  providing  access  to  effective  dispute  resolution  mechanisms  and  right  to 
redress  to  workers,  the  proposed  Directive  also  contributes  to  the  objectives  of  Directive 
2014/67/EU. 
Directive  2006/54/EC8  aims  to  ensure  the  implementation  of  the  principle  of  equal 
opportunities  and  equal  treatment  of  men  and  women  in  matters  of  employment  and 
occupation.  The  majority  of  minimum  wage  earners  being  women,  this  proposal  supports 
gender equality and the reduction of the gender pay gap by setting a framework for adequate 
minimum  wages  in  the  EU.  Therefore,  the  proposed  Directive  indirectly  contributes  to  the 
effective implementation of the policy objectives of Directive 2006/54/EC. 
Directive  2000/78/EC9  prohibits  direct  or  indirect  discrimination  in  employment,  notably 
based  on  age,  in  relation  to  working  conditions  including  pay  (Article  3(c)).  It  allows  for 
differences  of  treatment  if  objectively  and  reasonably  justified  by  a  legitimate  aim  such  as 
employment  policy  or  vocational  training  objectives.  The  proposed  Directive  is  consistent 
with this approach as it requires variations in the rates of statutory minimum wages to be kept 
to a minimum and, if relevant and objectively and reasonably justified by a legitimate aim, to 
be non-discriminatory, proportionate and limited in time. 

The  Commission  Recommendation  of  3  October  2008  on  the  active  inclusion  of  people 
excluded  from  the  labour  market10  puts  the  promotion  of  quality  jobs  through  adequate 
income support and inclusive labour market policies, including pay and working conditions, 
at the centre of Union and Member States’ action, with a view to preventing in-work poverty. 
The proposed Directive aims at improving working conditions and reducing in-work poverty 
by establishing a framework for adequate minimum wage levels and access to minimum wage 
protection provided by collective agreements or set in legal provisions. 

7  Directive (EU) 2014/67/EU of the European Parliament and the Council of 15 May 2014 on the enforcement of 
Directive  96/71/EC  concerning  the  posting  of  workers  in  the  framework  of the  provision  of  services  and 
amending  Regulation  (EU)  No  1024/2012  on  administrative  cooperation through  the  Internal  Market 
Information System (‘the IMI Regulation’). 

8  Directive 2006/54/EC of the European Parliament and the Council of 5 July 2006 on the implementation of the 
principle  of  equal  opportunities  and  equal  treatment  of  men  and  women  in  matters  of  employment  and 
occupation (recast). 

9  Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in 

employment and occupation. 

10 Commission Recommendation of 3 October 2008 on the active inclusion of people excluded from the labour 

market (2008/867/EC). 

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The  proposed  Directive  directly  refers  to  the  ‘social  clause’  of  Directive  2014/24/EU11  on 
public procurement, which can be also found in related Directive 2014/23/EU12 and Directive 
2014/25/EU13. The referred ‘social clause’ requires Member States to take measures to ensure 
that economic operators comply with the applicable labour law obligations in the performance 
of public procurement and concession contracts. To this end, the proposed Directive requires 
Member  States  to  take  appropriate  measures  to  ensure  that  in  the  performance  of  public  or 
concession  contracts  economic  operators  comply  with  the  wages  set  in  relevant  collective 
agreements  or  with  the  statutory  minimum  wages  when  they  exist.  This  can  contribute  to 
strengthening  the  enforcement  of  the  requirements  set  in  the  ‘social  clause’  of  the 
aforementioned Directives. 

The  content  of  the  above-mentioned  acts  has  been  duly  analysed  and  taken  into  account 
during the preparation process of the proposed Directive. As a result, the proposal is, on the 
one hand, coherent with the existing provisions and, on the other hand, introduces legislative 
developments necessary to achieve the Union’s goals. 

• 

Consistency with other Union policies 

The proposed Directive will contribute to the goals of the Union of promoting the well-being 
of its peoples, developing a highly competitive social market economy (Article 3 TFEU) and 
promoting improved living and working conditions (Article 151 TFEU). It also addresses the 
rights set out in the Charter of Fundamental Rights of the EU in relation to workers’ right to 
fair  and  just  working  conditions  (Article  31).  The  proposed  Directive  equally  contributes  to 
implementing the following principles of the European Pillar of Social Rights:  

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 

Principle  6  (Wages):  In  line  with  this  principle,  the  proposal  is  intended  to 
ensure adequate minimum wages, so that workers in the Union have the right 
to  fair  wages  that  provide  for  a  decent  standard  of  living,  in  full  respect  of 
national traditions and social partners’ autonomy. It also provides for statutory 
minimum wages to be set in a transparent and predictable way.  

Principle 8 (Social dialogue and involvement of workers): The proposal aims at 
promoting  collective  bargaining  on  wage  setting  with  a  view  to  foster 
minimum wage protection provided by collective agreements and promote the 
involvement of social partners in setting, updating, and implementing statutory 
minimum wages.  

Principle  2  (Gender  equality):  As  the  majority  of  minimum  wage  earners  are 
women,  by  supporting  adequate  minimum  wages,  the  proposal  will  support 
gender equality and contribute to the reduction of the gender pay gap. 

Principle  3  (Equal  Opportunities):  Everyone  has  the  right  to  equal  treatment 
and  opportunities  regarding  employment  regardless  of  gender,  age,  racial  or 
ethnic  origin,  religion  or  belief,  disability  or  sexual  orientation.  By  aiming  at 
ensuring  access  to  adequate  minimum  wage  protection  for  the  workers  in  the 

11 Directive 2014/24/EU of the European Parliament and the Council of 26 February 2014 on public procurement 

and repealing Directive 2004/18/EC. 

12 Directive  2014/23/EU  of  the  European  Parliament  and  the  Council  of  26  February  2014  on  the  award  of 

concession of contracts. 

13 Directive  2014/25/EU  of  the  European  Parliament  and  the  Council  of  26  February  2014  on  procurement  by 
entities  operating  in  the  water,  energy,  transport  and  postal  services  sectors  and  repealing  Directive 
2004/17/EC. 

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Union,  the  proposal  will  help  ensure  equal  treatment  and  foster  equal 
opportunities in employment. 

The  proposed  Directive  is  also  coherent  with  the  European  Semester  priorities.  In  line  with 
Employment  Guideline  5,  the  initiative  supports  the  call  made  to  Member  States  in  the 
Annual  Sustainable  Growth  Strategy  202114  to  adopt  measures  to  ensure  fair  working 
conditions.  In  addition,  it  also  supports  the  goals  set  in  the  Annual  Sustainable  Growth 
Strategy  202015,  according  to  which,  in  the  context  of  growing  social  divides,  ensuring  that 
each  worker  in  the  Union  earns  a  fair  wage  is  an  important  policy  objective.  It  is  also 
consistent with the Country-Specific Recommendations issued to some Member States since 
201116.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The  proposed  Directive  is  based  on  Article  153(1)  (b)  of  Treaty  on  the  Functioning  of  the 
European  Union  (TFEU),  which  prescribes  the  Union  to  support  and  complement  the 
activities  of  Member  States in the  field  of  working  conditions,  within  the  boundaries  of  the 
principles  of  subsidiarity  and  proportionality  (Article  5(3)  and  5(4)  TEU).  Since  it  does  not 
contain  measures  directly  affecting  the  level  of  pay,  it  fully  respects  the  limits  imposed  to 
Union action by Article 153(5) TFEU.  

Article  153(2)  allows  setting  minimum  requirements  by  the  means  of  directives,  while 
avoiding imposing administrative, financial and legal constraints in a way which would hold 
back the creation and development of small and medium-sized undertakings.  

• 

Subsidiarity (for non-exclusive competence)  

Having  access  to  a  minimum  wage  guaranteeing  a  decent  standard  of  living  is  a  pivotal 
element of adequate working conditions. While pay at national level falls unequivocally under 
the  competence  of  the  Member  States,  the  large  differences  in  standards  for  accessing  an 
adequate minimum wage are part of working conditions, and create important discrepancies in 
the Single Market, which can be best addressed at Union level.  

Workers in the majority of Member States are affected by insufficient adequacy and/or gaps 
in  coverage  of  minimum  wage  protection.  These  problems  affect  workers  both  in  the 
countries  with  statutory  minimum  wages  and  in  those  relying  on  collective  bargaining. 
Moreover, more workers are likely  to be affected  in the future due to the  secular decline in 
collective  bargaining  and  to  an  increasing  polarisation  of  the  labour  markets.  Looking 
forward,  this  creates  challenges  for  building  a  level  playing  field  in  the  Single  Market  and 
ensuring  that  competition  is  based  on  high  social  standards,  innovation  and  productivity 
improvements.  

Minimum  wage  policies  have  been  subject  to  multilateral  surveillance  within  the  European 
Semester,  and  the  EU  has  issued  policy  guidance  to  selected  Member  States.  Nevertheless, 
while  over  the  last  years  several  Member  States  have  taken  steps  towards  improving  their 
minimum  wage  systems,  national  action  has  not  been  enough  to  address  the  problem  of 
insufficient adequacy and/or coverage of minimum wage protection. Without policy action at 

14 Commission Communication COM(2020) 575 final. 
15 Commission Communication COM(2019) 650 final. 
16 See Annex A12.11 of the Impact Assessment. 

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EU level, individual countries may be little inclined to improve their minimum wage settings 
because of the perception that this could negatively affect their external cost competitiveness.  

Action  at  EU  level  will  be  more  effective  in  strengthening  minimum  wage  setting  systems 
than action at national level. It will set clearer expectations, ensure that progress is not partial 
or  uneven,  and  reinforce  trust  among  Member  States  and  social  partners.  This  will  help 
provide  the  necessary  momentum  for  reforming  minimum  wage  setting  mechanisms  at 
national level. Action at EU level will therefore contribute to ensuring a level playing field in 
the  Single  Market  by  helping  address  large  differences  in  the  coverage  and  adequacy  of 
minimum  wages  that  are  not  justified  by  underlying  economic  conditions.  This  cannot  be 
sufficiently achieved by uncoordinated action by the Member States. 

The proposed Directive sets a framework for minimum standards and respects Member States' 
competences to set higher standards, without prejudice to the role Member States may entrust 
to  social  partners,  according  to  national  traditions  and  in  full  respect  of  social  partners’ 
contractual  freedom.  In  line  with  Article  153(2)  (b)  TFEU,  the  proposed  Directive  will 
support and complement the activities of the Member States through minimum requirements 
for gradual implementation. 

• 

Proportionality 

The  proposed  Directive  provides  for  minimum  standards  thus  ensuring  that  the  degree  of 
intervention  will  be  kept  to  the  minimum  necessary  in  order  to  reach  the  objectives  of  the 
proposal. Member States which have already in place more favourable provisions than those 
put forward  in  this proposed  Directive will  not have  to  change their minimum wage setting 
systems. Member States may also decide to go beyond the minimum standards set out in the 
proposed Directive.  

The  proposal  respects  well-established  national  traditions  in  minimum  wage  setting.  In 
particular, it fully respects the competences of Member State and social partners to determine 
the level of their minimum wages in line with Art 153(5) TFEU. Minimum wage protection 
will continue to be provided through collective agreements or through legal provisions, in full 
respect of national competences and social partners’ contractual freedom. 

Moreover, the proposed Directive allows Member States to implement its provisions, notably 
those related to collective bargaining and statutory minimum wages, taking into account their 
national economic circumstances and the specificities of their minimum wage setting systems.  

Therefore,  the  proposal  leaves  as  much  scope  for  national  decisions  as  possible,  whilst  still 
achieving  the  objectives  of  improving  working  conditions  by  establishing  a  framework  for 
workers  in  the  Union  to  have  access  to  minimum  wage  protection.  The  principle  of 
proportionality is respected considering the size and nature of the identified problems.  

• 

Choice of the instrument 

Article  153(2)  (b)  TFEU  in  combination  with  153(1)  (b)  TFEU  foresees  explicitly  that 
Directives  may  be  used  for  establishing  minimum  requirements  concerning  working 
conditions to be gradually implemented by Member States. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Stakeholder consultations 

In  line  with  Article  154  TFEU,  the Commission  has  carried  out  a  two-stage  consultation  of 
the social partners on possible EU action in the area of minimum wages: 

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 

 

In the first stage, between 14 January and 25 February 2020, the Commission 
consulted social partners on the need for an initiative on minimum wages, and 
its possible direction17. 

In  the  second  stage,  between  3  June  and  4  September  2020,  the  Commission 
consulted social partners on the content and legal instrument of the envisaged 
proposal18. 

Workers’  organisations  generally  agreed  with  the  objectives  and  possible  content  of  the 
initiative, as identified in the second-stage consultation document. They stressed that national 
traditions  and  social  partners’  autonomy  should  be  respected.  Employers’  organisations 
generally showed support for most of the objectives and possible direction of an EU initiative, 
stated  in  the  consultation  document.  However,  some  of  them  questioned  the added  value  of 
EU  regulatory  action  regarding  minimum  wage  setting  in  view  of  the  diversity  of  national 
frameworks and stressed that the competences of Member States and/or social partners need 
to be fully respected.  

While  the  trade  unions  called  on  the  Commission  to  propose  a  Directive  with  binding 
minimum  requirements,  none  of  the  employers’  organisations  was  in  favour  of  a  binding 
directive in the area of minimum wages.  

There  was  no  agreement  among  social  partners  to  enter  into  negotiations  to  conclude  an 
agreement at Union level, as foreseen in Article 155 TFEU. 

Public  views  were  also  collected  through  the  replies  to  the  Standard  Eurobarometer  92 
(Autumn  2019),  which  included  questions  about  the  European  Union's  priorities  (including 
the minimum wage).  

Targeted  exchanges  of  views  with  the  Member  States  have  been  carried  out  through  the 
following  Council  Committees: 
the  Social  Protection 
Committees,  and  the  Economic  Policy  Committee19.  The  European  Parliament20  and  the 
European Economic and Social Committee21 have also adopted opinions of relevance for an 
EU initiative on adequate minimum wages22. 

the  Employment  Committee, 

• 

Collection and use of expertise 

The Commission contracted studies from external experts to gather evidence that was used to 
support the impact assessment. This included: 

 

 

A study on "Indexation of statutory minimum wage" by Diane Delaurens and 
Etienne Wasmer23; 

A study on “Effects of statutory minimum wages on small and medium-sized 
enterprises” by Attila Lindner, University College London24; 

17 Consultation Document, First phase consultation of the Social Partners under Article 154 TFEU on a possible 

action addressing the challenges related to fair minimum wages C(2020) 83 final. 

18 Consultation Document, Second phase consultation of the Social Partners on a possible action addressing the 
challenges  related  to  fair  minimum  wages,  C(2020)  3570  final,  accompanied  by  Staff  Working  Document 
SWD(2020) 105 final. 

19 See Annex A.2.3 of the Impact Assessment. 
20 European  Parliament  Resolution  of  10  October  2019  on  Employment  and  social  policies  of  the  euro  area, 

2019/2111. 

21 EESC opinion of 18 September 2020 on Decent minimum wages across Europe, SOC/632. 
22 See Annex A.2.4 of the Impact Assessment. 
23 Study produced by an external contractor, commissioned mid-2019 for the purposes of preparing the Impact 

Assessment. 

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 

A  study  on  “Effects  of  collectively  agreed  minimum  wages  in  the  Nordic 
countries”  by  Per  Skedinger,  Research  Institute  of  Industrial  Economics 
(IFN)25.  

The Commission additionally drew on its existing contracts to gather evidence that was used 
to support this impact assessment. This included: 

 

 

A set of expert reports on the minimum wage setting systems of EU Member 
States  (one  expert  report  for  each  Member  State)  provided  by  the  European 
Centre of Expertise (ECE);  

Simulations, within the framework of an existing contract, with the OECD tax-
benefit model on adequacy indicators and incentive effects of minimum wages.  

Within  the  existing  cooperation  framework  with  Eurofound,  the  Commission  requested  and 
received: 

 

Three country reports on the setting and adequacy of minimum wages as well 
as related policy debates focusing, respectively, on Austria, Italy and Cyprus. 

The  Commission’s assessment  has  also  relied  on  its  mapping  of  policies  in  Member  States, 
and the review of literature and related policy debates in the field. Moreover, analytical inputs 
were provided by different Directorates-General of the European Commission26. In particular, 
microsimulation analysis of economic, social and fiscal impacts of minimum wages has been 
conducted  using  the  Euromod  model.  Moreover,  model-based  simulations  to  assess  the 
macroeconomic  impact  of  minimum  wages  have  been  conducted  using  the  QUEST  model. 
Finally, an analysis of the characteristics of minimum wage and low-wage earners has been 
conducted based on anonymised individual data from the EU-SILC and EU-SES surveys. 

• 

Impact assessment 

Following the policy on Better Regulation the Commission carried out an Impact Assessment 
of  several  policy  options.  This  work  was  supported  by  structured  consultation  within  the 
Commission via an Inter-Service Steering Group. 

The Impact Assessment was presented to and discussed with the Regulatory Scrutiny Board 
(RSB). Recommendations made by the RSB in its first (negative) opinion of 2 October 2020 
were  notably  addressed  by:  (i)  better  distinguishing  to  what  extent  the  problems,  specific 
objectives,  proposed  solutions,  and  their  impacts  apply  to  the  different  types  of  minimum 
wage setting systems; (ii) further clarifying how the problem analysis assesses the inadequacy 
of  minimum  wages  across  Member  States;  (iii)  further  substantiating  how  the  legislative 
initiative  is  in  line  with  the  chosen  legal  base  and  the  subsidiarity  and  proportionality 
principles;  and  (iv)  clarifying  the  rationale  behind  the  composition  of  the  assessed  policy 
packages.  To  address  the  reservations  raised  by  the  Board  in  its  second  opinion  (positive 
opinion  with  reservations)  of  14  October  2020,  the  Impact  Assessment  Report  has  further 
clarified a number of elements: the rationale behind the composition of option packages, the 
most  relevant  measures  for  the  success  of  each  option  package,  the  impacts  on  SMEs,  the 

24 Study produced by an external contractor, commissioned mid-2019 for the purposes of preparing the Impact 

Assessment 

25 Study produced by an external contractor, commissioned mid-2019 for the purposes of preparing the Impact 

Assessment 

26 Directorate-General  for  Employment,  Social  Affairs  and  Inclusion,  Directorate-General  Economic  and 

Financial Affairs, and the Joint Research Centre. 

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choice  of  the  preferred  package  and  its  implications  for  countries  relying  on  collective 
bargaining27. 

Throughout  the  Impact  Assessment  work,  a  range  of  measures  were  considered  across  all 
important  areas  for  addressing  the  insufficient  adequacy  and  gaps  in  coverage  of  minimum 
wages.  The  Impact  Assessment  examined  three  policy  packages,  each  being  composed  of  a 
combination of different measures. Following an assessment of their effectiveness, efficiency 
and coherence, a preferred package was identified.  

The  preferred  package  asks  all  Member  States  to  support  collective  bargaining  on  wage 
setting, in particular when collective bargaining coverage is low, as well as to strengthen the 
enforcement  of  minimum  wages  and  the  monitoring  of  their  adequacy  and  coverage.  In 
addition, for Member States with statutory minimum  wages,  it requires the use of clear  and 
stable criteria to guide the setting and updating of minimum wages and an enhanced role of 
social  partners.  Moreover,  it  limits  the  use  of  deductions  to  and  variations  in  statutory 
minimum wages to a strict minimum. 

This package has been assessed in the Impact Assessment as the most effective, efficient and 
coherent. The quantitative analysis carried out on a scenario based on a hypothetical increase 
of  minimum  wages  to  60%  of  the  gross  median  wage  shows  that  it  would  improve  the 
adequacy of minimum wages in about half of the Member States. Between 10 and 20 million 
workers  would  benefit  from  these  improvements.  In  several  countries,  improvements  in 
minimum wage protection would result in a reduction of in-work poverty and wage inequality 
by  over  10%  and  a  reduction  in  the  gender  pay  gap  by  about  5%  or  more28.  They  are  also 
expected to improve work incentives, as well as to support gender equality and help reduce 
the  gender  pay  gap  as  the  majority  of  minimum  wage  earners  (about  60%  in  the  EU)  are 
women.  

The expected economic impacts include increased labour costs for firms, increased prices and, 
to a lesser extent, lower profits. The impact on firms would be mitigated by increases in the 
consumption  of  low-wage  earners,  which  would  support  domestic  demand.  Firms,  in 
particular  SMEs,  would  also  benefit  from  more  gradual  and  predictable  minimum  wage 
increases, which would improve the business environment.  

The possible negative impact on employment is expected to be limited. It would remain below 
0.5% of total employment in most cases, but would reach 1% in three Member States29. The 
benefits of an improved minimum wage protection for the concerned workers would greatly 
outweigh the possible negative employment impact on these workers.  

In  addition,  impacts  on  aggregate  competitiveness  are  expected  to  be  small.  The  preferred 
package  includes  sufficient  flexibility  to  allow  Member  States  to  determine  the  pace  of 
improving  the  adequacy  of  minimum  wages  in  light  of  economic  conditions  and  risks, 
including to specific sectors, regions and SMEs. 

• 

Fundamental rights 

The objectives of the proposed Directive are in line with the Charter of Fundamental Rights of 
the  European  Union,  in  particular  Article  31(1)  on  fair  and  just  working  conditions,  which 

27 See Annex I of the Impact Assessment. 
28 Average results of impacts on Member States for the scenario where the minimum wage is raised to 60% of the 

gross median wage or 50% of the gross average wage. See Annex A.12.2 in the Impact Assessment.  

29 The  sensitivity  of  employment  to  wage  increases  has  been  estimated  based  on  the  average  result  of  48 
international  studies  compiled by Dube, A. (2019):  “Impacts  of  minimum  wages:  review  of  the  international 
evidence”. Report prepared for the UK Low-Pay Commission. 

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provides  that  ‘Every  worker  has  the  right  to  working  conditions  which  respect  his  or  her 
health, safety and dignity’. The proposal also facilitates the exercise of the rights recognised 
in  Article  2330  of  the  Charter  of  Fundamental  Rights,  which  specifically  refer  to  equality 
between men and women, since it facilitates the reduction of the gender wage gap.  

4. 

BUDGETARY IMPLICATIONS 

The proposal does not require additional resources from the European Union's budget. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

Member States must transpose the Directive two years after the adoption and communicate to 
the Commission the national execution measures via the MNE-Database. In line with Article 
153(3) TFEU, they may entrust the social partners with the implementation of the Directive. 

To  assess  the  effectiveness  of  the  initiative,  the  Commission  will  report  every  year  to  the 
European Parliament and to the Council its assessment of developments in the adequacy and 
coverage  of  minimum  wage  protection  on  the  basis  of  annual  data  and  information  to  be 
provided by Member States. In  addition, progress should be  monitored in the framework of 
the  process  of  economic  and  employment  policy  coordination  at  EU  level  (European 
Semester). In this context, the Employment Committee will examine every year the situation 
of collective bargaining on wage setting and of adequacy of minimum wage protection in the 
Member States on the basis of the reports produced by the Commission.  

The Commission stands ready to provide technical support to Member States, notably through 
the  Technical  Support  Instrument31  and  the  European  Social  Fund  plus32,  to  implement  the 
Directive. 

The  Commission  will  also  conduct  an  evaluation  of  the  Directive  five  years  after  its 
transposition.  Moreover,  the  Commission  will  thereafter  submit  a  report  reviewing  the 
implementation of this Directive to the European Parliament and the Council. 

• 

Detailed explanation of the specific provisions of the proposal 

Chapter I – General provisions  

Article 1 – Subject matter 

This provision defines the subject of the Directive, namely to establish a framework at Union 
level  to  ensure  both  that  minimum  wages  are  set  at  adequate  level  and  that  workers  have 
access to minimum wage protection, in the form of a statutory minimum wage or of wages set 
by collective agreements.  

30 Article 23 (Equality between men and women) of the Charter of Fundamental Rights of the European Union 
states that “Equality between women and men must be ensured in all areas, including employment, work and 
pay. The principle of equality shall not prevent the maintenance or adoption of measures providing for specific 
advantages in favour of the under-represented sex”. 

31 Proposal for a Regulation of the European Parliament and of the Council of 28 May 2020 on the establishment 

of the Technical Support Instrument, COM(2020) 409 final. 

32 Proposal for a Regulation of the European Parliament and of the Council on the European Social Fund Plus, 

COM/2018/382 final. 

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The  Article  also  clarifies  that  the  Directive  does  not  interfere  with  the  freedom  of  Member 
States  to  set  statutory  minimum  wages  or  promote  access  to  minimum  wage  protection 
provided  by  collective  agreements,  according  to  national  traditions  and  in  full  respect  of 
social partners’ contractual freedom. It clarifies further that the Directive does not impose any 
obligation  to  introduce  a  statutory  minimum  wage  in  the  Member  States  where  it  does  not 
exist nor to make the collective agreements universally applicable. 

Article 2 – Scope 

This  article  clarifies  the  scope  of  the  Directive,  which  includes  workers  who  have  an 
employment  contract  or  an  employment  relationship  as  defined  by  the  law,  collective 
agreements or practice in each Member State, with consideration to the case-law of Court of 
Justice the European Union.  

This  approach  to  the  personal  scope  of  the  proposed  Directive  was  also  followed  for  the 
purpose of Directives 2019/1152 and 2019/1158. It allows to address risks to exclude from the 
scope  of  the  proposed  Directive  growing  numbers  of  workers  in  non-standard  forms  of 
employment,  such  as  domestic workers, on-demand workers, intermittent workers, voucher-
based  workers,  bogus  self-employed,  platform  workers,  trainees  and  apprentices.  The 
proposed Directive would apply to such workers, as long as they fulfil the criteria established 
by the Court of Justice as regards the definition of a ‘worker’. 

Article 3 – Definitions 

This provision defines a number of terms and concepts necessary to interpret the provisions of 
the Directive. 

Article 4 – Promotion of collective bargaining on wage setting 

This  provision  aims  at  increasing  the  collective  bargaining  coverage.  To  this  end,  Member 
States  are  required  to  take  action  to  promote  the  capacity  of  social  partners  to  engage  in 
collective  bargaining  on  wage  setting,  and  to  encourage  constructive,  meaningful  and 
informed negotiations on wages.  

Moreover, it requires that Member States where collective bargaining coverage (as defined in 
Article 3) does not reach at least 70% of the workers, provide for a framework for collective 
bargaining and establish an action plan to promote collective bargaining. 

Chapter II – Statutory minimum wages 

The provisions of this chapter only apply to Member States with statutory minimum wages. 

Article 5 – Adequacy 

With a view to ensuring statutory minimum wage adequacy, this provision requires Member 
States with statutory minimum wages to provide for the following elements: national criteria 
for statutory minimum  wage setting and updating defined in a stable and clear way; regular 
and timely updates; and the establishment of consultative bodies. 

The  national  criteria  should  include  at  least  the  purchasing  power  of  minimum  wages,  the 
general level of gross wages and their distribution, the growth rate of gross wages, and labour 
productivity  developments.  They  should  be  defined  in  accordance  with  national  practices, 
either  in  relevant  national  legislation,  in  decisions  of  the  competent  bodies  or  in  tripartite 
agreements. The Member States are also requested to use indicative reference values to guide 

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the assessment of the adequacy of statutory minimum wages, such as those commonly used at 
international level33.  

Article 6 – Variations and deductions 

To  promote  adequacy  of  minimum  wages  for  all  groups  of  workers,  this  provision  asks 
Member States, in consultation with the social partners, to limit the use of statutory minimum 
wage variations and their application in time and extent.  

The  article  also  provides  for  protection  of  statutory  minimum  wages  against  unjustified  or 
disproportionate  deductions.  Some  deductions  to  statutory  minimum  wages  may  indeed  be 
justified by a legitimate aim, for instance when ordered by a judicial authority. Others, such as 
deductions related to the equipment necessary to perform a job or deductions of allowances in 
kind, such as accommodation, may be unjustified or disproportionate.  

Article 7 – Social partners’ involvement in statutory minimum wage setting and updating 

This provision requires an effective and timely involvement of social partners in setting and 
updating  of  statutory  minimum  wages,  including  through  participation  in  the  consultative 
bodies mentioned under Article 5. It requires Member States to involve social partners in the 
definition  of  the  criteria  referred  to  in  Article  5,  the  updates  of  minimum  wages,  the 
establishment of variations and deductions mentioned in Article 6, and the collection of data 
and carrying out studies in the field. 

Besides  contributing  to  ensuring  and  preserving  minimum  wage  adequacy,  a  timely  and 
effective involvement of the social partners is also an element of good governance that allows 
for an informed and inclusive decision-making process. 

Article 8 – Effective access of workers to statutory minimum wages  

This provision requires Member States to take the necessary action, in cooperation with the 
social partners, to ensure effective access of workers to statutory minimum wage protection. 
The  required  action  would  notably  consist  of  reinforcing  the  controls  and  field  inspections 
system,  providing  guidance  for  enforcement  authorities,  and  giving  workers  adequate 
information on applicable statutory minimum wages.  

Chapter III - Horizontal provisions 

Article 9 – Public procurement 

This  provision  requires  that,  in  the  performance  of  public  procurement  and  concession 
contracts,  economic  operators  (including  the  subcontracting  chain  thereafter)  respect  the 
applicable  collectively  agreed  wages  and  statutory  minimum  wages  where  they  exist.  Non-
respect  of  statutory  minimum  wage  provisions  or  wages  set  in  collective  agreements  may 
indeed occur in the execution of such contracts, resulting in workers being paid less than the 
applicable minimum wage protection.  

The  obligation  set  in  this  provision  falls  within  applicable  obligations  in  the  field  of  labour 
law set in Articles 18(2) and 71(1) of Directive 2014/24/EU on public procurement, Articles 
36(2) and 88(1) of Directive 2014/25/EU on procurement by entities operating in the water, 
energy,  transport  and  postal  services  sectors  and  Articles  30(3)  and  42(1)  of  Directive 

33 Adequacy indicators commonly used at international level, e.g. the Kaitz index, compare the minimum wage to 
the  median  wage  or  the  average  wage.  In  addition,  a  standard  of  decent  living  defined  by  the  Council  of 
Europe’s compares the net minimum wage to the net average wage. Comparisons are also frequent between the 
minimum wage and the at-risk-of-poverty rate. 

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2014/23/EU  on  the  award  of  concession  contracts.  Clarifying  and  explicitly  referring  to  the 
above  provisions  is  intended  to  support  and  strengthen  their  implementation  in  the  field  of 
minimum wages. 

Article 10 – Monitoring and data collection 

This provision refers to the setting-up of an effective monitoring and data collection system. 
Member States are required to task their competent authorities with developing effective and 
reliable  data  collecting  tools,  which  should  enable  Member  States  to  report  the  relevant 
coverage- and adequacy-related data annually to the Commission.  

The  provision  requires  Member  States  to  ensure  that  the  information  regarding  collective 
agreements and their wage provisions is transparent and publicly available.  

With a view to monitoring the implementation of this Directive, this provision also foresees 
that  the  Commission  reports  to  the  European  Parliament  and  the  Council  its  assessment  of 
developments  in  the  adequacy  and  coverage  of  minimum  wages  on  the  basis  of  the 
information provided by Member States. In addition, based on the Commission’s report, the 
Employment  Committee  would  be  tasked  with  examining  the  promotion  of  collective 
bargaining on wage setting and the adequacy of minimum wages in the Member States, in the 
framework of the process of economic and employment policy coordination at EU level.  

Article 11 - Right to redress and protection against adverse treatment or consequences 

This provision requires Member States to ensure that, without prejudice to specific forms of 
redress  and  dispute  resolution  provided  for,  where  applicable,  in  collective  agreements, 
workers and their representatives have access to effective and impartial dispute resolution and 
a  right  to  redress,  including  to  adequate  compensation,  as  well  as  effective  protection  from 
any form of detriment in case they decide to exercise their right of defence of their rights with 
regard  to  established  minimum  wage  protection.  Member  States  have  to  make  sure  that 
protection  is  given  to  workers  and  their  representatives  from  adverse  treatment  or 
consequences  by  the  employer,  which  could  deter  workers  from  lodging  complaints  while 
their rights are violated. 

Article 12 – Penalties 

This provision requires Member States to provide for effective, proportionate and dissuasive 
penalties for breaches of national provisions establishing minimum wage protection. 

Chapter IV – Final provisions 

Article 13 –  Implementation 

This provision highlights that, pursuant to Article 153(3) TFEU, Member States may entrust 
the social partners with the implementation of the Directive, where social partners request to 
do so and as long as the Member States take all the necessary steps to ensure that they can at 
all times guarantee the results sought under this Directive. 

Article 14 - Dissemination of information 

This provision aims at ensuring awareness-raising in Members States on the rights granted by 
this Directive, as well as other already existing provisions in the same field. 

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Article 15 – Evaluation and review 

This provision stipulates that the Commission will conduct an evaluation of the Directive five 
years  after  its  transposition.  The  Commission  will  report  to  the  co-legislator  thereafter 
reviewing the implementation of the Directive and, if it considers necessary, make proposals 
to revise and update it. 

Article 16 – Non-regression and more favourable provisions 

This is a standard provision allowing Member States to provide a higher level of protection 
than  that  guaranteed  by  the  proposed  Directive,  and  preventing  its  use  to  lower  existing 
standards in the same fields. 

Article 17 - Transposition 

These are standard provisions establishing the maximum period that Member States have in 
order to transpose the Directive into national law and communicate the relevant texts to the 
Commission  (two  years)  and  the  obligation  for  Member  States  to  communicate  to  the 
Commission information concerning the application of this Directive.  

Article 18 – Entry into force 

This is a standard provision stipulating that the Directive is to enter into force on the twentieth 
day following its publication in the Official Journal. 

Article 19 - Addressees 

This is a standard provision on addressees, making clear that the Directive is addressed to the 
Member States. 

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2020/0310 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on adequate minimum wages in the European Union 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 153 (2), in conjunction with point (b) of Article 153 (1) thereof 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Economic and Social Committee1,  
Having regard to the opinion of the Committee of the Regions2,  

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Pursuant to Article 3 of the Treaty on European Union, the aims of the Union are, inter 
alia,  to  promote  the  well-being  of  its  peoples  and  to  work  for  the  sustainable 
development of Europe based on a highly competitive social market economy. 
Article 31 of the Charter of Fundamental Rights of the European Union3 provides for 
the right of every worker to working conditions which respect his or her health, safety 
and dignity. 

The  European  Social  Charter  establishes  that  all  workers  have  the  right  to  just 
conditions  of  work.  It  recognises  the  right  of  all  workers  to  a  fair  remuneration 
sufficient for a decent standard of living for themselves and their families. Article 4 of 
the Charter recognises the role of freely concluded collective agreements as well as of 
statutory minimum  wage setting mechanisms, to  ensure the effective exercise of this 
right.  

Chapter  II  of  the  European  Pillar  of  Social  Rights,  proclaimed  at  Gothenburg  on  17 
November  2017,  establishes  a  set  of  principles  to  serve  as  a  guide  towards  ensuring 
fair  working  conditions.  Principle  No  6  of  the  European  Pillar  of  Social  Rights 
reaffirms the workers’ right to fair wages that provide for a decent standard of living. 
It also provides that adequate minimum wages shall be ensured, in a way that provides 
for the satisfaction of the needs of the worker and his/her family in the light of national 
economic  and  social  conditions,  whilst  safeguarding  access  to  employment  and 
incentives to seek work. Furthermore, it recalls that in-work poverty shall be prevented 
and that all wages shall be set in a transparent and predictable way and respecting the 
autonomy of the social partners. 

1 
2 
3 

OJ C , , p. . 
OJ C , , p. . 
Charter of Fundamental Rights of the European Union, 2012/C 326/02 OJEU C326/391 of 26.10.2012. 

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(5) 

Guideline  5  of  Council  Decision  2020/  1512/EU  on  guidelines  for  the  employment 
policies  of  the  Member  States4  calls  on  Member  States  to  ensure  an  effective 
involvement of social partners in  wage-setting, providing for fair wages that enable a 
decent  standard  of  living  and  allowing  for  an  adequate  responsiveness  of  wages  to 
productivity  developments,  with  a  view  to  upward  convergence.  The  Guideline  also 
calls on Member States to promote social dialogue and collective bargaining on wage 
setting. It also calls on Member States and the social partners to ensure that all workers 
have  adequate  and  fair  wages  by  benefitting  from  collective  agreements  or  adequate 
statutory  minimum  wages,  and  taking  into  account  their  impact  on  competitiveness, 
job  creation  and  in-work  poverty.  The  Annual  Sustainable  Growth  Strategy  20215 
states that Member States should adopt measures to ensure fair working conditions. In 
addition, the Annual Sustainable Growth Strategy 20206 recalled that in the context of 
growing  social  divides,  it  is  important  to  ensure  that  each  worker  earns  an  adequate 
wage.  Several  Country  Specific  Recommendations  have  also  been  issued  to  some 
Member States in the field of minimum wages. However, individual countries may be 
little inclined to improve their minimum wage settings because of the perception that 
this could negatively affect their external cost competitiveness. 

(6) 

Better  working  and  living  conditions,  including  through  adequate  minimum  wages, 
benefit both workers and businesses in the Union and are a prerequisite for achieving 
inclusive  and  sustainable  growth.  Addressing  large  differences  in  the  coverage  and 
adequacy of minimum wage protection contributes to improving the fairness of the EU 
labour  market  and  promote  economic,  social  progress  and  upward  convergence. 
Competition in the Single Market should be based on high social standards, innovation 
and productivity improvements ensuring a level playing field.  

(7)  When  set  at  adequate  levels,  minimum  wages  protect  the  income  of  disadvantaged 
workers, help ensure a decent living, and limit the fall in income during bad times, as 
recognised  in  Convention  131  of  the  International  Labour  Organisation  on  the 
establishment  of  a  system  of  minimum  wage  fixing.  Minimum  wages  contribute  to 
sustaining domestic demand, strengthen incentives to work, reduce wage inequalities 
and in-work poverty.  

(8)  Women,  young  and  low-skilled  workers  and  persons  with  disabilities  have  a  higher 
probability  of  being  minimum  wage  or  low  wage  earners  than  other  groups.  During 
economic  downturns,  such  as  the  Covid-19  crisis,  the  role  of  minimum  wages  in 
protecting  low-wage  workers  becomes  increasingly  important  and  is  essential  to 
support  a  sustainable  and  inclusive  economic  recovery.  Addressing  minimum  wage 
contributes  to  gender  equality,  closing  the  gender  pay  and  pension  gap  as  well  as 
elevating women out of poverty. 

(9) 

The Covid-19 pandemic is having a significant impact on the services sector and small 
firms, which both have a high share of minimum wage earners. In addition, minimum 
wages  are  also  important  in  view  of  the  structural  trends  that  are  reshaping  labour 
markets and which are increasingly characterised by high shares of non-standard and 
precarious work. These trends have led to an increased job polarisation resulting in an 

4 

5 
6 

Council Decision 2020/1512/EU of 13 October 2020 on guidelines for the employment policies of the 
Member States (OJ L 344, 19.10.2020, p. 22–28). 
Commission Communication COM(2020) 575 final. 
Commission Communication COM(2019) 650 final. 

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increasing  share  of  low-paid  and  low-skilled  occupations  in  most  Member  States,  as 
well as to higher wage inequality in some of them.     

(10)  While minimum wage protection exists in all Member States, in some that protection 
stems  from  legislative  provisions  (“statutory  minimum  wages”)  and  from  collective 
agreements while in others it is provided exclusively, through collective agreements.  

(11)  Minimum wage protection set out by collective agreements in low-paid occupations is 
adequate in most cases; statutory minimum wages are low compared to other wages in 
the economy in several Member States. In 2018, the statutory minimum wage did not 
provide  sufficient  income  for  a  single  minimum-wage  earner  to  reach  the  at-risk-of-
poverty  threshold  in  nine  Member  States.  In  addition,  the  use  of  reduced  minimum 
wage  rates  (variations)  and  deductions  from  statutory  minimum  wages  negatively 
affect their adequacy.  

(12)  Not  all  workers  in  the  Union  are  protected  by  minimum  wages.  In  some  Member 
States some workers, even though they are covered, receive in practice a remuneration 
below  the  statutory  minimum  wage  due  to  the  non-respect  of  existing  rules.  In 
particular,  such  non-compliance  has  been  found  to  affect  notably  women,  young 
workers,  people  with  disabilities  and  agricultural  workers.  In  Member  States  where 
minimum wage protection is provided only through collective agreements, the share of 
workers not covered is estimated to vary from 2% to 55% of all workers. 

(13)  While  strong  collective  bargaining  at  sector  or  cross-industry  level  contributes  to 
ensuring  adequate  minimum  wage  protection,  traditional  collective  bargaining 
structures have been eroding during the last decades, in part due to structural shifts in 
the  economy  towards  less  unionised  sectors  and  to  the  decline  in  trade  union 
membership related to the increase of atypical and new forms of work. 

(14)  The  Commission  has  consulted  management  and  labour  in  a  two-stage  process  with 
regard to possible action to address the challenges related to adequate minimum wages 
protection  in  the  Union,  in  accordance  with  Article  154  of  the  Treaty  on  the 
Functioning  of  the  European  Union.  There  was  no  agreement  among  the  social 
partners  to  enter  into  negotiations  with  regard  to  those  matters.  It  is,  however, 
important  to  take  action  at  Union  level  to  ensure  that  workers  in  the  Union  are 
protected by adequate minimum wages, taking into account the outcomes of the social 
partners’ consultation.  

(15)  This  Directive  establishes  minimum  requirements  at  Union  level  to  ensure  both  that 
minimum  wages  are  set  at  adequate  level  and  that  workers  have  access  to  minimum 
wage protection, in the form of a statutory minimum wage or in the form of wages set 
under collective agreements as defined for the purpose of this Directive.  

(16) 

In  full  respect  of  Article  153(5)  of  the  Treaty  on  the  Functioning  of  the  European 
Union,  this  Directive  neither  aims  to  harmonise  the  level  of  minimum  wages  across 
the Union nor to establish an uniform mechanism for setting minimum wages. It does 
not  interfere  with  the  freedom  of  Member  States  to  set  statutory  minimum  wages  or 
promote  access  to  minimum  wage  protection  provided  by  collective  agreements, 
according  to  the  traditions  and  specificities  of  each  country  and  in  full  respect  of 
national competences and social partners’ contractual freedom. This Directive does not 
impose  an  obligation  on  the  Member  States  where  minimum  wage  protection  is 
ensured exclusively via collective agreements to introduce a statutory minimum wage 
nor to make the collective agreements universally applicable. Also, this Directive does 

EN 

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not establish the level of pay, which falls within the contractual freedom of the social 
partners at national level and within the relevant competence of Member States.  

(17)  This  Directive  should  apply  to  workers  who  have  an  employment  contract  or 
employment  relationship  as  defined  by  the  law,  collective  agreements  or  practice  in 
force in each Member State, with consideration to the criteria established by the Court 
of Justice of the European Union for determining the status of a worker. Provided that 
they fulfil those criteria, domestic workers, on-demand workers, intermittent workers, 
voucher  based-workers,  bogus  self-employed,  platform  workers, 
trainees  and 
apprentices  could  fall  within  the  scope  of  this  Directive.  Genuinely  self-employed 
persons  do  not  fall  within  the  scope  of  this  Directive  since  they  do  not  fulfil  those 
criteria. The abuse of the status of self-employed persons, as defined in national law, 
either at national level or in cross-border situations, is a form of falsely declared work 
that  is  frequently  associated  with  undeclared  work.  Bogus  self-employment  occurs 
when  a  person  is  declared  to  be  self-employed  while  fulfilling  the  conditions 
characteristic  of an employment relationship,  in order  to  avoid  certain legal or  fiscal 
obligations.  Such  persons  should  fall  within  the  scope  of  this  Directive.  The 
determination of the existence of an employment relationship should be guided by the 
facts relating to the actual performance of the work and not by the parties' description 
of the relationship.  

(18)  Well-functioning  collective  bargaining  on  wage  setting  is  an  important  means  to 
ensure that workers are protected by adequate minimum wages. In the Member States 
with  statutory  minimum  wages,  collective  bargaining  supports  general  wage 
developments  and  therefore  contributes  to  improving  the  adequacy  of  minimum 
wages. In the Member States where minimum wage protection is provided exclusively 
by  collective  bargaining,  their  level  as  well  as  the  share  of  protected  workers  are 
directly  determined  by  the  functioning  of  the  collective  bargaining  system  and 
collective  bargaining  coverage.  Strong  and  well-functioning  collective  bargaining 
together  with  a  high  coverage  of  sectorial  or  cross-industry  collective  agreements 
strengthen the adequacy and the coverage of minimum wages.  

(19) 

In a context of declining collective bargaining coverage, it is essential that the Member 
States  promote  collective  bargaining  to  enhance  workers’  access  to  minimum  wage 
protection  provided  by  collective  agreements.  Member  States  with  a  high  collective 
bargaining coverage tend to have a low share of low-wage workers and high minimum 
wages.  Member  States  with  a  small  share  of  low  wage  earners  have  a  collective 
bargaining  coverage  rate  above  70%.    Similarly,  the  majority  of  the  Member  States 
with  high  levels  of  minimum  wages  relative  to  the  median  wage  have  a  collective 
bargaining  coverage  above  70%.  While  all  Member  States  should  be  encouraged  to 
promote collective bargaining, those who do not reach this level of coverage should, in 
consultation and/or agreement with the social partners, provide for or, where it already 
exists,  strengthen  a 
institutional 
arrangements  enabling  the  conditions  for  collective  bargaining.  Such  framework 
should be established by law or by tripartite agreement..  

facilitative  procedures  and 

framework  of 

(20)  Sound  rules,  procedures  and  practice  for  setting  and  updating  statutory  minimum 
wages are necessary to deliver adequate minimum wages, while safeguarding jobs and 
the  competitiveness  of  firms  including  small  and  medium-sized  enterprises.  They 
include a number of elements to preserve the adequacy of statutory minimum wages, 
including  criteria  and  indicators  to  assess  adequacy,  regular  and  timely  updates,  the 
existence of consultative bodies and the involvement of social partners. A timely and 

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19 

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effective involvement of the latter is another element of good governance that allows 
for an informed and inclusive decision-making process.  

(21)  Minimum  wages  are  considered  adequate  if  they  are  fair  in  relation  to  the  wage 
distribution  in  the  country  and  if  they  provide  a  decent  standard  of  living.  The 
adequacy  of  statutory  minimum  wages  is  determined  in  view  of  the  national  socio-
economic  conditions,  including  employment  growth,  competitiveness  as  well  as  
regional  and  sectoral  developments.  Their  adequacy  should  be  assessed  at  least  in 
relation  to  their  purchasing  power,  to  the  productivity  developments  and  to  their 
relation  to  the  gross  wage  levels,  distribution  and  growth.  The  use  of  indicators 
commonly used at international level, such as 60% of the gross median wage and 50% 
of the gross average wage, can help guide the assessment of minimum wage adequacy 
in relation to the gross level of wages. 

(22)  To  promote  adequacy  of  minimum  wages  for  all  groups  of  workers,  variations  and 
deductions  from  statutory  minimum  wages  should  be  limited  to  a  minimum,  while 
ensuring that social partners are duly consulted in their definition. Some deductions to 
statutory  minimum  wages  may  be  justified  by  a  legitimate  aim,  including  overstated 
amounts paid or deductions ordered by a judicial authority. Others, such as deductions 
related  to  the  equipment  necessary  to  perform  a  job  or  deductions  of  allowances  in 
kind, such as accommodation, may be unjustified or disproportionate.  

(23)  An effective enforcement system, including controls and field inspections, is necessary 
to  ensure  the  functioning  of  national  statutory  minimum  wage  frameworks.  To 
strengthen  the  effectiveness  of  enforcement  authorities,  a  close  cooperation  with  the 
social  partners  is  also  needed,  including  to  address  critical  challenges  such  as  those 
related 
to  sub-contracting,  bogus  self-employment  or  non-recorded  overtime. 
Moreover, workers should have easily access to appropriate information on applicable 
statutory  minimum  wages  to  ensure  an  adequate  degree  of  transparency  and 
predictability as regards their working conditions. 

(24)  The effective implementation of minimum wage protection set out by legal provisions 
or  provided  by  collective  agreements  is  essential  in  the  performance  of  public 
procurement and concession contracts. Non-respect of collective agreements providing 
for minimum wage protection in a given sector may indeed occur in the execution of 
such  contracts  or  in  the  sub-contracting  chain  thereafter,  resulting  in  workers  being 
paid less than the wage level agreed in the sectoral collective agreements. To prevent 
such  situations,  economic  operators  have  to  apply  to  their  workers  the  wages  set  by 
collective agreements for the relevant sector and geographical area in order to abide by 
applicable obligations in the field of labour law, in accordance with Articles 18(2) and 
71(1) of Directive 2014/24/EU of the European Parliament and the Council on public 
procurement7,  Articles  36(2)  and  88(1)  of  Directive  2014/25/EU  of  the  European 
Parliament and the Council8 on procurement by entities operating in the water, energy, 
transport  and  postal  services  sectors  and  Articles  30(3)  and  42(1)  of  Directive 

7 

8 

EN 

Directive  2014/24/EU  of  the  European  Parliament  and  of  the  Council  of  26 February  2014  on  public 
procurement and repealing Directive 2004/18/EC (OJ L 94, 28.3.2014, p. 65). 

Directive  2014/25/EU  of  the  European  Parliament  and  of  the  Council  of  26 February  2014  on 
procurement  by  entities  operating  in  the  water,  energy,  transport  and  postal  services  sectors  and 
repealing Directive 2004/17/EC (OJ L 94, 28.3.2014, p. 243). 

20 

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2014/23/EU of the European Parliament and the Council 9on the award of concession 
contracts.  

(25)  Reliable  monitoring  and  data  collection  are  key  to  ensure  the  effective  protection  of 
minimum  wages.  The  Commission  should  report  every  year  to  the  European 
Parliament  and  to  the  Council  its  assessment  of  developments  in  the  adequacy  and 
coverage  of  minimum  wages  on  the  basis  of  annual  data  and  information  to  be 
provided  by  Member  States.  In  addition,  progress  should  be  monitored  in  the 
framework of the process of economic and employment policy coordination at Union 
level.  In  that  context,  the  Employment  Committee  should  examine  every  year  the 
situation in the Member States on the basis of the reports produced by the Commission 
and other multilateral surveillance tools such as benchmarking. 

(26)  Workers  should  be  in  a  position  to  exercise  their  right  of  defence  when  their  rights 
relating to established minimum wage protection are violated. In order to prevent that 
workers  are  deprived  from  their  rights,  and  without  prejudice  to  specific  forms  of 
redress and dispute resolution provided for in collective agreements, including systems 
of collective dispute resolution, Member States should take the necessary measures to 
ensure that they have access to effective and impartial dispute resolution and a right to 
redress, including to adequate compensation, as well as effective protection from any 
form of detriment in case they decide to exercise their right of defence.  

(27)  The Commission should conduct an evaluation providing the basis for a review on the 
effective implementation of this Directive. The Council and the European Parliament 
should be informed of the results of such review. 

(28)  The  reforms  and  measures  adopted  by  the  Member  States  to  promote  adequate 
minimum  wage  protection  of  workers,  while  being  steps  in  the  right  direction,  have 
not been comprehensive and systematic. Moreover, individual countries may be little 
inclined  to  improve  the  adequacy  and  coverage  of  minimum  wages  because  of  the 
perception that this could negatively affect their external cost competitiveness. Since 
the objectives of this Directive cannot be sufficiently achieved by the Member States, 
but can rather, by reason of their scale and effects, be better achieved at Union level, 
the Union may adopt measures, in accordance with the principle of subsidiarity as set 
out in Article 5 of the Treaty on the European Union. In accordance with the principle 
of proportionality, as set out in that Article, this Directive does not go beyond what is 
necessary in order to achieve those objectives. 

(29)  This  Directive  lays  down  minimum  requirements,  thus  leaving  untouched  Member 
States'  prerogative  to  introduce  and  maintain  more  favourable  provisions.  Rights 
acquired under the existing national legal framework should continue to apply, unless 
more  favourable  provisions  are  introduced  by  this  Directive.  The  implementation  of 
this Directive cannot be used to reduce existing rights for workers, nor can it constitute 
valid  grounds  for  reducing  the  general  level  of protection  afforded  to  workers in  the 
field covered by this Directive. 

(30) 

In implementing this Directive Member States should avoid imposing administrative, 
financial  and  legal  constraints  in  a  way  which  would  hold  back  the  creation  and 
development  of  micro,  small  and  medium-sized  enterprises.  Member  States  are 
therefore invited to assess the impact of their transposition act on small and medium-

9 

Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award 
of concession contract (OJ L 94, 28.3.2014, p. 1). 

EN 

21 

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sized enterprises in order to ensure that they are not disproportionately affected, giving 
specific attention to micro-enterprises and to the administrative burden, and to publish 
the  results  of  such  assessments.  If  found  that  micro,  small  and  medium-sized 
enterprises are disproportionately affected, Member States should consider introducing 
measures to support these enterprises to adjust their remuneration structures to the new 
requirements. 

(31)  The Technical Support Instrument10 and the European Social Fund plus11 are available 
to  Member  States  to  develop  or  improve  the  technical  aspects  of  minimum  wage 
frameworks,  including  on  assessment  of  adequacy,  monitoring  and  data  collection, 
broadening access, as well as on enforcement and on general capacity building related 
to the implementation of said frameworks. 

HAVE ADOPTED THIS DIRECTIVE: 

CHAPTER I  

GENERAL PROVISIONS 

Article 1 

Subject matter 

1. 

With a view to improving working and living conditions in the Union, this Directive 
establishes a framework for: 

(a) 

(b) 

setting adequate levels of minimum wages; 

access of workers to minimum wage protection, in the form of wages set out by 
collective  agreements    or  in  the  form  of  a  statutory  minimum  wage  where  it 
exists.  

2. 

3. 

This Directive shall be without prejudice to the full respect of the autonomy of social 
partners, as well as their right to negotiate and conclude collective agreements. 

This Directive shall be without prejudice to the choice of the Member States to set 
statutory minimum wages or promote access to minimum wage protection provided 
by collective agreements. 

Nothing  in  this  Directive  shall  be  construed  as  imposing  an  obligation  on  the 
Member States where wage setting is ensured exclusively via collective agreements 
to  introduce  a  statutory  minimum  wage  nor  to  make  the  collective  agreements 
universally applicable.  

Article 2 

Scope 

This  Directive  applies  to  workers  in  the  Union  who  have  an  employment  contract  or 
employment relationship as defined by law, collective agreements or practice in force in each 

10 

11 

Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  of  28  May  2020  on  the 
establishment of the Technical Support Instrument, COM(2020) 409 final 
Proposal for a Regulation of the European Parliament and of the Council on the European Social Fund 
Plus, COM/2018/382 final.   

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Member  State,  with  consideration  to  the  case-law  of  the  Court  of  Justice  of  the  European 
Union. 

For the purposes of this Directive, the following definitions apply: 

Article 3 

Definitions 

(1) 

(2) 

(3) 

‘minimum  wage’  means  the  minimum  remuneration  that  an  employer  is 
required  to  pay  to  workers  for  the  work  performed  during  a  given  period, 
calculated on the basis of time or output;  

‘statutory  minimum  wage’  means  a  minimum  wage  set  by  law,  or  other 
binding legal provisions; 

‘collective  bargaining’  means  all  negotiations  which  take  place  between  an 
employer, a group  of employers or one or  more  employers’  organisations, on 
the  one  hand,  and  one  or  more  workers’  organisations,  on  the  other,  for 
determining  working  conditions  and  terms  of  employment;  and/or  regulating 
relations between employers and workers; and/or  regulating relations between 
employers  or  their  organisations  and  a  worker  organisation  or  worker 
organisations;  

(4) 

‘collective  agreement’  means  all  agreements  in  writing  regarding  working 
conditions  and  terms  of  employment  concluded  by  the  social  partners  as  an 
outcome of collective bargaining;  

(5) 

‘collective bargaining coverage’ means the share of workers at national level to 
whom a collective agreement applies;  

Article 4  

Promotion of collective bargaining on wage setting  

1. 

With  the  aim  to  increase  the  collective  bargaining  coverage    Member  States  shall 
take, in consultation with the social partners, at least the following measures: 

2. 

(a) 

promote the building and strengthening of the capacity of the social partners to 
engage  in  collective  bargaining  on  wage  setting  at  sector  or  cross-industry 
level;  

(b) 

encourage  constructive,  meaningful  and  informed  negotiations  on  wages 
among social partners; 

Member States where collective bargaining coverage is less than 70% of the workers 
defined within the meaning of Article 2 shall in addition provide for a framework of 
enabling conditions for collective bargaining, either by law after consultation of the 
social  partners  or  by  agreement  with  them,  and  shall  establish  an  action  plan  to 
promote  collective  bargaining.  The  action  plan  shall  be  made  public  and  shall  be 
notified to the European Commission. 

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CHAPTER II  

STATUTORY MINIMUM WAGES 

Article 5 

Adequacy 

1. 

Member States with statutory minimum wages shall take the necessary measures to 
ensure  that  the  setting  and  updating  of  statutory  minimum  wages  are  guided  by 
criteria set to promote adequacy with the aim to achieve decent working and living 
conditions,  social  cohesion  and  upward  convergence.  Member  States  shall  define 
those  criteria  in  accordance  with  their  national  practices,  either  in  relevant  national 
legislation,  in  decisions  of  the  competent  bodies  or  in  tripartite  agreements.  The 
criteria shall be defined in a stable and clear way.  

2. 

The  national  criteria  referred  to  in  paragraph  1  shall  include  at  least  the  following 
elements: 

(a) 

the purchasing power of statutory minimum wages, taking into account the cost 
of living and the contribution of taxes and social benefits; 

(b) 

the general level of gross wages and their distribution; 

(c) 

the growth rate of gross wages; 

(d) 

labour productivity developments. 

Member  States  shall  use  indicative  reference  values  to  guide  their  assessment  of 
adequacy of statutory minimum wages in relation to the general level of gross wages, 
such as those commonly used at international level.  

Member  States  shall  take  the  necessary  measures  to  ensure  the  regular  and  timely 
updates of statutory minimum wages in order to preserve their adequacy.  

Member States shall establish consultative bodies to advise the competent authorities 
on issues related to statutory minimum wages.  

Article 6 

Variations and deductions  

Member  States  may  allow  different  rates  of  statutory  minimum  wage  for  specific 
groups  of  workers.  Member  States  shall  keep  these  variations  to  a  minimum,  and 
ensure  that  any  variation  is  non-discriminatory,  proportionate,  limited  in  time  if 
relevant, and objectively and reasonably justified by a legitimate aim.  

Member  States  may  allow  deductions  by  law  that  reduce  the  remuneration  paid  to 
workers to a level below that of the statutory minimum wage. Member States shall 
ensure  that  these  deductions  from  statutory  minimum  wages  are  necessary, 
objectively justified and proportionate.  

3. 

4. 

5. 

1. 

2. 

Article 7 

Involvement of social partners in statutory minimum wage setting and updating 

Member  States  shall  take  the  necessary  measures  to  ensure  that  the  social  partners  are 
involved in a timely and effective manner in statutory minimum wage setting and updating, 

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24 

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including through participation in consultative bodies referred to in Article 5(5) and notably 
as concerns: 

(a) 

the selection and application of criteria and indicative reference values referred 
to in Article 5 (1) (2) and (3) for the determination of statutory minimum wage 
levels; 

(b) 

the updates of statutory minimum wage levels referred to in Article 5 (4); 

(c) 

(d) 

the  establishment  of  variations  and  deductions  in  statutory  minimum  wages 
referred to in Article 6; 

the  collection  of  data  and  the  carrying  out  of  studies  for  the  information  of 
statutory minimum wage setting authorities; 

Effective access of workers to statutory minimum wages  

 Article 8 

Member  States  shall,  in  cooperation  with  social  partners,  take  the  following  measures  to 
enhance the access of workers to statutory minimum wage protection as appropriate: 

(1) 

strengthen the controls and field inspections conducted by labour inspectorates 
or the bodies responsible for the enforcement of statutory minimum wages. The 
controls and inspections shall be proportionate and non-discriminatory; 

(2)  develop guidance for enforcement authorities to proactively target and pursue 

non-compliant businesses; 

(3) 

ensure  that  information  on  statutory  minimum  wages  is  made  publicly 
available in a clear, comprehensive and easily accessible way. 

CHAPTER III  

HORIZONTAL PROVISIONS 

Article 9 

Public procurement 

In accordance with Directive 2014/24/EU, Directive 2014/25/EU and Directive 2014/23/EU, 
Member  States  shall  take  appropriate  measures  to  ensure  that  in  the  performance  of  public 
procurement  or  concession  contracts  economic  operators  comply  with  the  wages  set  out  by 
collective  agreements  for  the  relevant  sector  and  geographical  area  and  with  the  statutory 
minimum wages where they exist.  

Article 10 

Monitoring and data collection 

1. 

Member States shall task their competent authorities with developing effective data 
collection tools to monitor the coverage and adequacy of minimum wages.  

EN 

25 

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2. 

Member States shall report the following data to the Commission on an annual basis, 
before 1 October of each year: 

(a) 

for statutory minimum wages: 

(i) 

the  level  of  the  statutory  minimum  wage  and  the  share  of  workers 
covered by it; 

(ii) 

the existing variations and the share of workers covered by them; 

(iii) 

the existing deductions; 

(iv) 

the rate of collective bargaining coverage. 

(b) 

for minimum wage protection provided only by collective agreements: 

(i) 

the  distribution  in  deciles  of  such  wages  weighted  by  the  share  of 
covered workers; 

(ii) 

the rate of collective bargaining coverage; 

(iii) 

the  level  of  wages  for  workers  not  having  minimum  wage  protection 
provided by collective agreements  and its relation to the level  of wages 
of workers having such minimum protection. 

Member  States  shall  provide  the  statistics  and  information  referred  to  in  this 
paragraph disaggregated by gender, age, disability, company size and sector. 

The first report shall cover years [X, Y, Z: the three years preceding the transposition 
year]  and  shall  be  delivered  by  [1st  of  October  YY:  year  after  transposition].  The 
Member  States  may  omit  statistics  and  information  which  are  not  available  before 
[date of transposition]. 

The  Commission  may  request  Member  States  to  provide  further  information  on  a 
case by case basis where it considers such information necessary for monitoring the 
effective implementation of this Directive.  

Member  States  shall  ensure  that  information  regarding  minimum  wage  protection, 
including  collective  agreements  and  wage  provisions  therein,  is  transparent  and 
publicly accessible. 

The  Commission  shall  assess  the  data  transmitted  by  the  Member  States  in  the 
reports  referred  to  in  paragraph  2,  and  shall  report  annually  to  the  European 
Parliament and to the Council.  

On the basis of the report issued by the Commission, the Employment Committee set 
up in accordance with Article 150 TFEU shall carry out every year an examination of 
the  promotion  of  collective  bargaining  on  wage  setting  and  of  the  adequacy  of 
minimum wages in the Member States. 

Article 11 

Right to redress and protection against adverse treatment or consequences 

Member States shall ensure that, without prejudice to specific forms of redress and 
dispute resolution provided for, where applicable, in collective agreements, workers, 
including those whose employment relationship has ended, have access to effective 
and  impartial  dispute  resolution  and  a  right  to  redress,  including  adequate 
compensation,  in  the  case  of  infringements  of  their  rights  relating  to  statutory 
minimum wages or minimum wage protection provided by collective agreements.  

3. 

4. 

5. 

1. 

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2. 

Member States shall take the measures necessary to protect workers, including those 
who are  workers’  representatives,  from any adverse  treatment  by the employer  and 
from any adverse consequences resulting from a complaint lodged with the employer 
or  resulting  from  any  proceedings  initiated  with  the  aim  of  enforcing  compliance 
with  the  rights  relating  to  statutory  minimum  wages  or  minimum  wage  protection 
provided by collective agreements.  

Article 12 

Penalties 

Member States shall lay down the rules on penalties applicable to infringements of national 
provisions. The penalties provided for shall be effective, proportionate and dissuasive. 

CHAPTER IV  

FINAL PROVISIONS 

Article 13 

Implementation 

Member  States  may  entrust  the  social  partners  with  the  implementation  of  this  Directive, 
where the social partners jointly request to do so. In so doing, the Member States shall take all 
necessary steps to ensure that the results sought by this Directive are guaranteed at all times. 

Article 14 

Dissemination of information 

Member  States  shall  ensure  that  the  national  measures  transposing  this  Directive,  together 
with the relevant provisions already in force relating to the subject matter as set out in Article 
1, are brought to the attention of workers and employers, including SMEs. 

Article 15 

 Evaluation and review 

The Commission shall conduct an evaluation of the Directive by [five years after the date of 
transposition].  The  Commission  shall  submit thereafter  a report  to  the  European  Parliament 
and  the  Council  reviewing  the  implementation  of  the  Directive  and  propose,  where 
appropriate, legislative amendments. 

Article 16  

Non-regression and more favourable provisions 

1. 

2. 

This  Directive  shall  not  constitute  valid  grounds  for  reducing  the  general  level  of 
protection already afforded to workers within Member States. 

This  Directive  shall  not  affect  Member  States’ prerogative to  apply  or  to  introduce 
laws, regulations or administrative provisions which are more favourable to workers 

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3. 

1. 

or  to  encourage  or  permit  the  application  of  collective  agreements  which  are  more 
favourable to workers.  

This Directive is without prejudice to any other rights conferred on workers by other 
legal acts of the Union.  

Article 17 

Transposition 

Member States shall adopt the measures necessary to comply with this Directive by 
[two  years  from  the  date  of  entry  into  force].  They  shall  immediately  inform  the 
Commission thereof.  

When Member States adopt those measures, they shall contain a reference to this Directive or 
be  accompanied  by  such  reference  on  the  occasion  of  their  official  publication.  Member 
States shall determine how such reference is to be made. 

2. 

Member States shall communicate to the Commission the text of the main measures 
of national law which they adopt in the field covered by this Directive.  

Article 18 

Entry into force 

This  Directive  shall  enter  into  force  on  the  twentieth  day  following  its  publication  in  the 
Official Journal of the European Union.  

Article 19 

Addressees 

This Directive is addressed to the Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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