COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the European Pillar of Social Rights
Date: 2026-07-22
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: EU employment policy, European social policy, economic policy, housing, labour market, poverty, social dialogue (EU), social integration, social rights, working conditions

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 22.7.2026  COM(2026) 650 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS on the European Pillar of Social Rights {SWD(2026) 650 final}  
 
 
Communication on the European Pillar of Social Rights  

Introduction 

The European Union is founded on the belief that social progress and human dignity are 
the bedrock of a fair, democratic and resilient society. Article 3 of the Treaty on European 
Union sets the Union the objective of a highly competitive social market economy aiming at 
full employment and social progress, and reflects a lineage running from the Treaty of Rome’s 
vision of shared prosperity to the social vision defined in the 1989 Community Charter of the 
Fundamental Social Rights of Workers and affirmed in the Charter of Fundamental Rights. This 
steadfast commitment to the Union’s values and principles has shaped a Europe that seeks to 
lead the way globally in solidarity, equality, and people’s well-being.  

The European Pillar of Social Rights is social Europe’s defining framework.  The Pillar 
was proclaimed to guide the European social model, which has been a success story and has 
made the EU a world-class place, to live, to work and to study. It remains the EU’s social shield 
and compass for fairness in an age of fast-transformation and challenge, but also opportunity. 
It is a permanent reminder of the kind of Europe the Union seeks to build: a Europe that protects 
and empowers citizens. 

Jointly proclaimed in 2017 by the European Parliament, the Council and the Commission, the 
European  Pillar  of  Social  Rights’  20  principles  established  a  shared  framework  to 
promote social rights and improve living and working conditions across the EU. The 2021 
Action  Plan  endorsed  at  the  Porto  Social  Summit  translated  these  principles  into  concrete 
initiatives  to  strengthen  the  EU’s  social  fabric,  putting  forward  75  actions  and  three  2030 
headline  targets.  The Action  Plan  also  reinforced  the  Union's  commitment  to  fundamental 
rights and the achievement of the Sustainable Development Goals under the 2030 Agenda. 

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The Pillar has guided measures at EU level and in Member States, proving its value as a 
shield in times of crisis and a compass to help guide us through the transformations facing 
the EU, as confirmed in the 2024 La Hulpe Declaration. The COVID-19 pandemic, Russia’s 
war of aggression against Ukraine, and the ensuing energy and cost-of-living crisis tested the 
EU’s social fabric. Yet, through EU solidarity and effective crisis response instruments – such 
as  SURE,  the  Recovery  and  Resilience  Facility  and  cohesion  policy  funds  –  alongside 
investments and reforms at national and regional level, the Union collectively managed these 
shocks while safeguarding jobs, skills and social protection. Today, however, the challenges 
are evolving:  geopolitical  tensions,  the overall security situation,  trade frictions, democratic 
backsliding  and  fragmented  international  cooperation  demand  that  Europe  strengthens 
resilience from within. 

The Pillar and its principles remain as relevant as ever – if not more so – as we need to 
anticipate, prepare for and manage structural changes. Demographic shifts – highlighted 
in the 2026 Commission report Demographic transformation in the EU: understanding change 
and adapting to its consequences – are accelerating changes in the EU’s workforce and society. 
The digital and green transitions, amidst global geopolitical challenges and security concerns, 
are also reshaping Europe’s industry, jobs and skills demands. Managing these shifts requires 
a regulatory environment that allows businesses to invest and grow, as well as education and 
training  systems  to  equip  everyone  with  in-demand  skills,  access  to  quality  and  affordable 
services,  including  to  support  an  inclusive  labour  market,  and  robust  social  protection  and 
social inclusion systems. In order to  support  this balance,  as the “One Europe, One Market 
Roadmap” asserts, Europe’s industrial policy must be developed “in a manner that respects the 
European Pillar of Social Rights creating a just transition that secures quality jobs and leaves 
no one behind.”  

The Pillar also continues to shape the Commission's external action by promoting high labour 
and social  standards beyond the EU. Building  on the 2021 Action Plan, the Commission  is 
strengthening  multilateral  engagement,  advancing  decent  work  and  responsible  business 
conduct in global value chains, and supporting partner countries in aligning their employment, 
skills and social policies with the principles of the Pillar. As a key benchmark for enlargement 
and  neighbourhood  countries1,  the  Pillar  promotes  the  EU  social  model  while  providing  a 
framework for dialogue, cooperation and mutual learning.  

With the 10th anniversary of the Pillar’s proclamation approaching, this Communication 
aims at further deepening the implementation of the Pillar. It takes stock of progress to 
date and identifies concrete priorities where further action is needed to anticipate and deliver 
the opportunities brought by the transformations facing the EU. This Communication proposes 
additional targeted actions which complement the 2021 Action Plan and will deliver concrete 
added value, in line with the EU’s commitment to simplification and implementation. It also 
sets  the  path  for  further  strategic  reflection  and  anticipation  and  management  of  structural 
changes. With the cost of inaction far outweighing investment, integrating social considerations 
into all policy areas is essential for Europe’s prosperity and competitiveness. 

1   Also in relation to the Pact for the Mediterranean 

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1.  Progress since the 2021 Action Plan on the 2030 headline targets  

The 2021 Action Plan set three EU-level headline targets, including sub-targets, to be reached 
by 2030:2  

•  at least 78% of people aged 20 to 64 should be in employment compared to 2019 

o  at least halve the gender employment gap  
o 
increase the provision of formal early childhood education and care (ECEC) 
o  decrease the rate of young people neither in employment, nor in education or 

training (NEETs) aged 15-29 from 12.6% (2019) to 9% 
•  at least 60% of all adults should be participating in training every year  

o  at least 80% of those aged 16-74 should have basic digital skills 
o  early  school  leaving  should  be  further  reduced  and  participation  in  upper 

secondary education increased 

•  at least 15 million fewer people at risk of poverty or social exclusion, compared to 

2019 
o 

this should include at least 5 million children 

The  targets  were  endorsed  by  EU  leaders  at  the  Porto  Social  Summit  in  May  2021  and 
subsequently  reflected  in  national  targets.  Progress  towards  the  headline  targets  has  been 
uneven3, with persistent regional and territorial disparities. The EU-level trends are as follows: 

•  Standing at 76.1% in 2025, the EU is on course to meet its employment target. The 
gender  employment gap  now stands at  9.6 pp, which represents  a slight  decrease of 
1.3pp. since 2021. However, the 2026 Spring Economic Forecast points to softening 
labour demand that could weigh on this progress in the years ahead. Employment rates 
of specific groups show a mixed picture (e.g. a persisting disability employment gap, 
24.2 pp in 2025 and a Roma employment gap of 21 pp in 2024). 

•  Significant further efforts are needed on the skills target. Adult participation in learning 

stood at 39.5% in 2022, against a target of 60%. 

•  More progress is also needed on the poverty reduction target. The number of people 
at risk of poverty or social exclusion in the EU fell by around 3.5 million between 2019 
and 2025, falling short of the target reduction of 15 million.  

The  headline  targets  are  not  out  of  reach  but  achieving  them  will  require  stronger 
implementation  efforts  at  both  EU  and  Member  State  level.  Progress  on  the  sub-targets  is 
reported  in  the  accompanying  Staff  Working  Document.  The  Commission  will  continue  to 
monitor  progress  towards  the  EU  2030  targets.  Combating  poverty  demands  data-driven, 
evidence-based policymaking, supported by comparable high-quality indicators.  

While there is positive development on the rate of employment, further efforts are still needed 
on  its  quality,  focusing  on  well-paid  jobs  with  opportunities  for  personal  and  professional 

2 The 2021 Action Plan also set different sub-targets, which are further detailed in the Staff Working Document. 
3  Progress on the three 2030 headline targets is tracked on an annual basis through the Joint Employment Report. 

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development, autonomy and purpose, within an adaptive work environment. This encompasses 
fair wages, job security, occupational safety and health, wellbeing at work, social protection, 
gender equality, and equal opportunities. The 2025 Quality Jobs Roadmap outlined the policy 
actions to support quality jobs in a competitive economy. 

Actions: 

•  The Commission will strengthen the monitoring of job quality in the EU based on 
the  updated  job  quality  monitoring  framework  of  the  Employment  Committee 
(EMCO), including in the Joint Employment Report (JER). 

•  Following the work already started, the Commission will initiate a consultation of 
Member States, through the Employment Committee, and with relevant stakeholders 
on a possible new target on job quality beyond 2030. 

•  The Commission will put forward a Quality Jobs Act (Q4 2026). 

•  As announced in the EU Anti-Poverty Strategy, to improve monitoring of poverty, 
the  Commission  will  put  forward  new  indicators  to  measure  the  impact  of 
affordability components and reflect different dimensions of poverty, with a view to 
having  them  agreed  by  2028.  Subject  to  agreement  with  the  Employment,  Social 
Policy, Health and Consumers Affairs Council (EPSCO) and its advisory committees, 
this could then also lead to a review of the related indicators in the social scoreboard 
in view of strengthening the relevant analysis in the Social Convergence Framework.  

2.  The 2021 Action Plan: implementation and delivery 

The 2021 Action Plan  has been  implemented through  a collective effort  by  EU institutions, 
Member  States,  regional  and  local  authorities,  social  partners,  civil  society,  and  other 
stakeholders. Political momentum was strengthened at the Porto Social Summit (May 2021), 
where EU leaders endorsed the headline targets and reaffirmed their support for the European 
Pillar of Social Rights. This was further reinforced by the La Hulpe Declaration (April 2024), 
which  underscored  the  Pillar’s  role  as  Europe's  social  compass  and  called  for  its  continued 
implementation amid the green, digital and demographic transitions. The  Pact for European 
Social Dialogue (2025) renewed the commitment to strengthen social dialogue and address key 
labour market and economic challenges. 

The Action Plan’s final milestone was its own review. For this purpose, the Commission carried 
out broad internal  and external consultations in 2025, alongside an analytical assessment of 
progress  in  implementing  the  75  initiatives.  The  goal  was  to  take  stock  of  achievements, 
identify remaining gaps and inform future priorities.  

The findings reveal tangible progress since the Pillar’s proclamation nearly a decade ago. New 
social  rights  and  protections  have  been  codified  and  operationalised  across  the  EU,  with 
advances  –  though  uneven  –  toward  all  three  headline  targets.  However,  the  review  also 
identified persistent implementation gaps and the need to accelerate the implementation of key 
initiatives. Strengthening delivery is a shared responsibility across EU, national, regional, and 

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local levels, with social partners and civil society playing a central role. The findings of the 
review are detailed in the accompanying Staff Working Document.  

3.  Strengthening the implementation of the Pillar  

Since the adoption of the Action Plan in 2021, the environment in which social and employment 
policies  operate  has  changed  dramatically.  Through  the  consultation  and  analysis,  the 
Commission has identified three pressure points which require urgent and additional attention. 
These  are  complementary  to  existing  and  ongoing  Commission  initiatives  on  jobs,  skills, 
mobility and poverty reduction, strengthening their implementation and focusing on new and 
rapidly evolving challenges. 

3.1 The cost of living and affordability 

In recent years, the cost of living has emerged as Europeans’ biggest concern. High costs 
for housing, food, energy, transport and other essential goods and services impact heavily on 
living  standards,  social  inclusion  and  economic  security,  particularly  among  households  in 
vulnerable situations and young people. The cost of living also has implications for democratic 
resilience:  persistent  income  insecurity,  perceived  unfairness  and  reduced  opportunities  can 
weaken trust in institutions and fuel social fragmentation.  

Looking  ahead,  additional  challenges  may  further  increase  pressure  on  households, 
potentially  impacting  further  on  poverty  and  social  exclusion.  Employment  growth  is 
projected  to  remain  positive  but  slow  to  0.3%  in  2026  and  0.4%  in  2027,  while  recent 
geopolitical developments, including military tensions and shifts in global trade patterns, risk 
generating additional inflationary pressures. Low-income households are particularly exposed 
to such pressures. Obtaining a more granular overview of how the rising cost of living affects 
different  groups  in  society  could  help  better  monitor  the  situation  of  different  groups 
experiencing poverty, as well as the situation of women.  

Fostering access to the labour market and quality jobs is one clear pathway out of the 
affordability crisis. While employment in the EU is at a record high, a considerable reservoir 
of untapped talent  remains outside the labour market.  In 2025,  almost  50 million  people  of 
working age were outside the labour force, alongside 12 million unemployed people and 6.5 
million underemployed workers (including part-time workers, especially women) who wished 
to work full-time but were unable to find such opportunities. Women account for the largest 
share of non-participation with around 32 million of those in working age being outside the 
labour market. Their labour market participation  is strongly affected by gender inequalities, 
including  the  uneven  distribution  of  family  and  care  responsibilities,  as  well  as  by  the 
availability and quality of care services.  

Facilitating transitions from inactivity to work is not only important for labour market 
inclusion and competitiveness, but also one of the most effective tools for reducing poverty 
and  exclusion.  Bringing  more  people  into  the  labour  market  contributes  directly  to  GDP 
growth, reduces skills shortages and broadens the tax and social contribution base needed to 
sustain Europe's social protection systems. With a view to exploring possible further measures, 
in full respect of subsidiarity and proportionality in this field, the Commission is thus launching 

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the first-phase consultation of EU social partners on the possible direction of an EU action on 
activation of of persons facing significant barriers to employment. 

Public Employment Services continue to play a central role through personalised guidance, 
skills assessment, activation measures and job matching. The Commission will submit in 2026 
an evaluation report on the European Network of Public Employment Services and, subject to 
its findings, will propose the continuation of the Network. Social dialogue will also remain 
essential to anticipate skills needs, identify barriers to labour market participation and develop 
solutions adapted to sectoral realities. 

The Directive on  adequate  minimum  wages in  the  EU  in  force  since  2022, was  a  crucial 
achievement  for  ensuring  fair  working  conditions.  It  established a  common  framework 
to ensure the  adequacy  of  statutory  minimum  wages and  promote  collective  bargaining on 
wage-setting. Since its adoption, minimum wages have increased significantly across the EU, 
notably in the countries with the lowest levels. This has helped raise pay and living standards 
for many workers: in-work poverty rates have steadily fallen from a high of 9.6% in 2016 to 
8.3%  in  2025.  More  details  can  be  found  in  the  monitoring  report  published  alongside  this 
Communication.  

Housing  has  emerged  as  a  particularly  acute  challenge  –  especially  in  urban  areas.  In 
many regions, housing costs have risen faster than incomes, limiting access to affordable and 
quality housing and affecting labour  and learning mobility, family formation and social and 
territorial cohesion. Demand for social housing has become more important in the context of 
limited public and private investments in affordable housing. As part of the EU Anti-Poverty 
Strategy  presented  on  6  May,  a  proposed Council  Recommendation  on  fighting  housing 
exclusion emphasises  long-term  solutions  and  prevention  to  combat  housing  exclusion  and 
homelessness. It  also  promotes  more  social  and  affordable  housing,  focusing  on  a  people-
centred approach. The European Affordable Housing Plan sets out a strategy to tackle the wider 
housing  crisis  across  Europe.  It  aims  to  increase  housing  supply,  trigger  investment  and 
reforms,  and  support  the  people  and  the  areas  that  are  most  affected.  The  Commission  is 
preparing the Affordable Housing Act, to support public authorities in identifying areas of 
housing stress and enable them to take measures to protect and promote housing affordability 
in those areas. The recently adopted Council Recommendation on the New European Bauhaus 
(NEB) encourages Member States to align their national policies to an integrated approach to 
the design and transformation of buildings, neighbourhoods and public spaces. Member States 
should use all available funding possibilities including through cohesion funds and the Social 
Climate Fund to support affordable and social housing. Member States are invited to integrate 
the housing dimension in other relevant policies or in areas, including social welfare, equality, 
employment,  urban,  rural  and  regional  development,  territorial  cohesion,  research  and 
development and healthcare4. The Commission will publish a study on housing inequality and 
discrimination  in  2027,  as  well  as  a  housing  simplification  package  that  will  contribute  to 
facilitate the supply of affordable housing. 

4  Council Conclusions on Housing: shifting demographics and shaping policies.  

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Food poverty is also a growing concern in EU, as the share on EU population unable to afford 
a meal with meat, chicken, fish (or vegetarian equivalent) every second day has increased from 
6.8 % in 2019 to 8.5 % in 2025, although with important disparities across Member States. The 
Commission will publish in 2026 a study on food affordability, and will launch a pilot project 
on food access. 

Energy  poverty  continues  to  affect  millions  of  Europeans.  9.2%  of  EU  households  were 
unable in 2024 to keep their home adequately warm while 26% of them were unable in 2026 
to  keep  their  homes  comfortably  cool  in  summer.  Energy  renovations  or  access  to  energy 
efficiency solutions and renewable energy sources, are the most effective ways to address the 
root causes of energy poverty and prevent vulnerability. The Citizens Energy Package, adopted 
by the Commission in March 2023, underlines the importance of tackling energy poverty in the 
EU with a focus on protecting and empowering consumers.  

Transport  poverty,  understood  as  the  inability  or  difficulty  to  meet  the  costs  of  private  or 
public transport, or lack of access to transport services, is another important challenge: 21% 
of households at risk of poverty face unaffordable transport costs. Decarbonisation and strong 
climate action are among the most effective ways to reduce high energy and transport costs, 
making essential services more affordable, and at the same time strengthening Europe’s energy 
independence. Good examples in that context are the investments financed with the revenue 
from the sale of ETS allowance via the Social Climate Fund and relevant climate action and 
reforms.5    

Access to essential services, enshrined in the Pillar, is a critical yet often overlooked dimension 
of  affordability.  Even  when  services  exist,  barriers  such  as  high  costs,  physical  distance, 
bureaucratic hurdles, or lack of awareness often exclude people, especially those in vulnerable 
situations. Closing these gaps is essential for social cohesion, as unequal access exacerbates 
territorial  inequalities.  Services  of  General  Economic  Interest  (SGEI)  play  a  key  role  in 
promoting  social  and  territorial  cohesion.  Under  EU  State  aid  rules  revised  in  2025, 
compensation  for  the  provision  of  SGEI  can  be  envisaged  by  Member  States  in  relation  to 
affordable and social housing, access to and reintegration into the labour market or the care and 
social inclusion of vulnerable groups including accessibility and assistive technology services 
for persons with disabilities. Member States should combine these tools with broader strategies, 
such  as  the  Council  Recommendation  on  the  Social  Economy  (2023),  to  uphold  universal 
access and territorial fairness.  

Building on the European Care Strategy (September 2022), the Commission will work towards 
a  more  coherent  framework  for  addressing  long-term  care  workforce  challenges  and  will 
present a European Care Deal in 2027. By strengthening the availability and access to care 
services,  the  initiative  will  contribute  to  Europe's  competitiveness,  reducing  pressure  on 

5  To  strengthen  the  evidence  base,  the  Commission’s  Joint  Research  Centre  has  developed  high-resolution 
accessibility indicators, available through the Transport Poverty Hub, to identify areas across the EU where poor 
transport connectivity limits access to essential services.  

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informal carers and by stimulating job creation in the sector as well as investments into digital 
enabled technologies supporting both carers and people in need of care. 

Actions:  

•  The Commission will launch the first-phase consultation of EU social partners on 
the  possible  direction  of  EU  action  on  activation  of  persons  facing  significant 
barriers to employment, including regarding equality between men and women with 
regards to labour market opportunities (together with this Communication). 

•  The Commission will put forward an Affordable Housing Act (Q3 2026)to support 
public  authorities  in  identifying  areas  of  housing  stress  and  enable  them,  in  full 
respect of subsidiarity, to take measures to protect and promote housing affordability 
in those areas, and a housing simplification package (2027). 

•  The Commission will put forward a European Care Deal (2027). 

•  The Commission presents a monitoring report on the Adequate Minimum Wages 

Directive (together with this Communication). 

3.2 Artificial Intelligence (AI) – the future of work and shared prosperity  

The  rapid  development  and  adoption  of  artificial  intelligence  (AI),  accelerated  by  the 
emergence of generative AI since 2022, is transforming labour markets and society at large. 
It offers major opportunities for innovation, productivity, learning and growth – but raises also 
important  critical  questions  about  the  future  of  jobs,  education,  skills,  social  inclusion,  and 
fundamental rights. In the EU in 2025, nearly 20% of enterprises used some form of generative 
AI, and 61% of European workers believe they will need new skills to keep pace with AI by 
2029, while only 15% have received any training so far, as a Cedefop survey revealed.  

Europe must be ready for these profound changes, ensuring that citizens, workers and 
businesses fully benefit from AI’s potential. As the European Declaration on Digital Rights 
and Principles for the Digital Decade emphasises, a human-centred digital transformation is 
essential to ensure that digital technologies respect fundamental rights and European values. 
Social rights, grounded in the Pillar principles, are at the centre of this transformation. 

When it comes to the impact of AI on labour demand and the organisation of work, the 
aggregate impacts in the EU appear small to date, even though certain groups, notably young 
people  in  entry-level  positions,  risk  seeing  a  slow-down  in  hiring  in  some  sectors  and 
occupations.  AI  is  expected  to  accelerate  employment  growth  –  in  2025,  firms  making 
significant  use  of AI  were  about  4  percentage  points  more  likely  to  have  expanded  their 
workforce than firms that did not use AI. Such job gains are likely to be concentrated in some 
occupations,. AI can also transform existing jobs and skills requirements, notably digital and 
soft skills. However, the trends are still volatile and need to be better understood. As highlighted 
in  the Apply AI  Strategy,  key  priorities  include  upskilling  and  reskilling,  supporting  labour 
market transitions through effective activation policies and adequate income protection. In this 

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context, the Commission continues to develop real-time labour market intelligence and early 
warning tools. 

Besides the impact of AI, parallel labour market and demographic trends across the EU bring 
to the fore sectors with strong job creation potential, replacement needs and growing labour 
demand (i.e. “job creation engines”), including long-term care, healthcare, construction, social 
services, circular economy and clean tech. Empowering workers to access new opportunities 
and raise productivity is a key collective task, involving policy-makers, education and training 
providers, public employment services and social partners. Ensuring that the jobs created are 
quality jobs will be essential to their attractiveness and sustainability over time.  

Moreover, AI can help strengthen public services. AI-powered profiling and job-matching 
tools can help public employment services provide more targeted support, for example through 
better  job  matching,  more  personalised  support  and  earlier  identification  of  unemployment 
risks. It can also improve the recognition and matching of skills. AI can improve preparedness 
and support healthcare and long-term care systems facing growing pressures from demographic 
ageing, in particular in areas struggling to provide adequate access to essential services. By 
improving diagnosis, service delivery and administrative efficiency, AI can contribute to better 
outcomes for citizens while making welfare systems more effective and sustainable. 

When not properly designed and used, AI can also raise important concerns regarding equal 
opportunities and inclusion. The use of AI in the labour market and in public administrations 
comes with a risk of algorithmic bias, including biases embedded in the data used to train AI 
systems,  potentially  reinforcing  inequalities  and  discrimination  affecting  different  groups, 
particularly if AI systems were not designed and deployed in a manner compliant with the AI 
Act.6 Effective implementation and compliance with EU legal instruments, such as the AI Act, 
is key for addressing biases and risks. At the same time, AI can reshape how individuals learn, 
reskill, and solve problems. As emphasised in the Apply AI Strategy, boosting AI literacy is a 
key enabler for inclusion and equal opportunities and crucial to ensure Europeans can use these 
tools critically and responsibly. These developments raise pressing policy questions for the 
EU. Policymakers must consider how AI will affect future labour demand and supply, affect 
inequality,  and  more  broadly  test  the  resilience  of  the  European  social  model.  Moreover, 
reliance on non-European AI technologies can bring additional risks, notably where sensitive 
data,  critical  infrastructure  or  security-relevant  functions  are  involved.  Adequate  policy 
responses  must  therefore  be  found  to  reduce  risks  associated  with  technological  disruption 
while enabling the EU to realise AI’s economic and societal benefits. 

6 AI-powered profiling and job-matching tools will frequently be considered as high-risk AI systems under Annex 
III, points 4 and 5 of the AI Act. In this context, providers of high-risk AI systems will be subject to stringent 
obligations designed to ensure that their AI systems do not, among others, pose a risk to fundamental rights, are 
accurate  and unbiased, and can be adequately overseen. Deployers of high-risk AI systems are also subject to 
relevant obligations that concern, for instance, human oversight, monitoring the operation and keeping the logs of 
AI systems. In addition to the high-risk rules, the AI Act also imposes, inter alia, includes targeted prohibitions, 
including  in  what  regards  to AI  systems  inferring  emotions  in  the  workplace  (Article  5(1)(f))  and  biometric 
categorisation AI systems that categorise individually natural persons based on certain characteristics such as trade 
union membership (Article 5(1)(g)). 

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To realise these benefits, Member States will need the administrative and institutional capacity 
to  deploy  AI  responsibly.  This  includes  appropriate  governance  arrangements,  human 
oversight,  data  management,  impact  assessment,  monitoring  and  safeguards  against 
discrimination and other risks to fundamental rights, in line with the AI Act. 

Actions:  

•  The Commission will set up a High-level Experts Group to examine the potential 
impact  of  AI  on  the  labour  market,  ensuring  coherence,  complementarity  and 
synergies with existing initiatives,  including the AI Observatory launched as part of 
the Apply AI Strategy, with a view to:  

o  Develop  scenarios  for 

the  potential 

long-term  trajectory  for  EU 
employment, as impacted by the deployment of AI in workplaces, building 
on  inputs  from  the  AI  Observatory  and  the  European  Skills  Intelligence 
Observatory. 

o  Examine  how  the  impacts  of AI  on  jobs  can  be  anticipated  and  managed 
most  effectively,  including  by  considering  enhanced  analytical  tools  for 
monitoring, early warning, foresight and anticipation of the impact of AI on 
jobs to equip policymakers, businesses and social partners; and considering 
avenues for calibrating labour market policies and improving the functioning 
of labour markets.  

•  Without prejudging possible EU action in the context of the Quality Jobs Act, for 
which  a  consultation  of  the  EU  social  partners  is  ongoing,  the  Commission  will 
consider    support  activities  for  the  responsible  adoption  of  Algorithmic 
Management tools and practices in workplaces, such as sharing of good practices, 
mutual learning and capacity building.  

3.3 Inequalities, fairness and equal opportunities 

The European Union remains firmly committed to reducing persistent inequalities  that 
undermine  social  and  territorial  cohesion,  economic  resilience  and  the  fundamental  Pillar’s 
promise of equal opportunities for all. In the Union, inequalities are markedly lower than in 
most other parts of the world, as a result of the implementation of the European social model. 
Despite  progress  during  the  last  years,  inequalities  persist  in  all  areas  of  life,  requiring 
continued  efforts  to  implement  cost-effective  measures.  Inequalities  are  not  merely  a  social 
concern, but structural barriers that weaken the EU’s long-term sustainability, innovation and 
competition capacity and demographic fabric. 

Europeans increasingly perceive that life is not fair: in 2022, only 38 % perceived that most 
outcomes in their lives occur fairly, down from 51% in 2017. Income inequality decreased 

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following the COVID-19 pandemic but still remain high: the top 20% earn almost five times 
the income of the bottom 20%. Wealth concentration is even more pronounced: according to 
the  European  Central  Bank  2025  data  for  the  Euro  area,  the  wealthiest  10%  owned  around 
57.3%  of  total  net  wealth  of  households  (largely  unchanged  compared  to  2023),  whilst  the 
bottom 50% owned around 5%. 

Regional  and  territorial  disparities  continue  to  exacerbate  social  inequalities  by  limiting 
access  to  quality  education,  employment,  healthcare,  long-term  care  and  other  essential 
services. Disadvantaged  neighbourhoods, rural  and remote areas,  and outermost  regions are 
particularly affected, facing population decline, youth outmigration and the risk of falling into 
or deepening talent development traps. These challenges carry significant social and economic 
costs,  undermining  territorial  cohesion,  competitiveness  and  the  full  potential  of  the  Single 
Market. 

At the same time, socio-economically disadvantaged, discriminated and marginalised groups 
are often more exposed to pollution and environmental degradation, and to the negative effects 
of climate change (floods, wildfires, heatwaves, soil shrinking, etc.), with fewer opportunities 
to  move  away  from  risks.  Environmental  inequalities  are  also  present  in  housing:  lower-
income households are more likely to live in inadequate and sometimes poorly insulated homes 
and may have limited ability to move away from areas exposed to risks such as flooding. 

To  close  these  gaps,  decisive  action  has  been  taken  under  the  2021 Action  Plan  to  tackle 
inequalities and widen access to equal opportunities. To prevent unintended consequences – 
from the very beginning – policies need to be designed with distributional effects in mind. The 
Commission will publish a study on distributional impacts assessments in the Member States 
in 2027 and will further promote their use in policy-making. 

The  Union  of  Equality  provides  an  overarching  policy  framework,  covering  strategies  for 
gender equality, LGBTIQ+  equality, the rights  of persons with disabilities, anti-racism, and 
Roma equality, inclusion and participation. The Commission will monitor and report on the 
implementation of this framework, including national developments, through the forthcoming 
Union of Equality reporting. 

The  enforcement  of  EU  anti-discrimination  laws  and  policies  also  remains  central.  For 
example, the Racial Equality Directive and the Employment Equality Directive aim to prevent 
and combat discrimination based on racial or ethnic origin, religion or belief, disability, age, 
and  sexual  orientation.  Effective,  proportionate,  and  dissuasive  sanctions  are  essential  to 
combating discrimination and the barriers it creates to employment and other areas of life. The 
Commission calls on Member States to ensure effective sanctions against discrimination.  

The  Pay  Transparency  Directive  ,  which  entered  into  force  in  May  2023,  and  had  to  be 
transposed into national law by Member States by June 2026, reinforces the principle of equal 
pay for equal work or work of equal value between men and women, helping to advance gender 
equality  in  the  labour  market.  The  Commission  remains  fully  committed  to  ensure  its 
implementation and enforcement. To this end, the Commission will continue to provide support 
to  Member  States  and  social  partners  to  implement  the  Directive  effectively,  keeping 
administrative  burden  proportionate  while  ensuring  full  compliance.  Furthermore,  the 

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Commission will provide further support in particular to SMEs, as key actors in realising the 
tangible impact of fair and transparent pay practices, including to ensure that implementation 
entails the least possible administrative burden.  

Unequal career progression is also visible in the gender pension gap (standing at 23.9% in the 
EU in 2025) and higher poverty rates for older women (standing at 21.9% in the EU for 65+ 
women  in  2025). The  Intergenerational  Fairness  Strategy  and  the  Gender  Equality  Strategy 
2026-2030 highlight that inequalities in employment, pay, and unpaid care work accumulate 
over the life course and lead to significant gender gaps in pensions and income security in old 
age.  

Healthcare  coverage has a poverty-reducing  impact  comparable to  cash transfers, and  well-
designed healthcare reform can further contribute to the EU’s anti-poverty effort. It is 
essential  for  Member  States  to  leverage  the  potential  of  the  tools  and  guidelines  developed 
under  EU4Health  actions,  including  those  that  can  trigger  a  fairer  distribution  of  health 
benefits,  more  affordable  healthcare,  or  improve  access  to  healthcare  for  persons  with 
disabilities. These  actions  also  include  instruments  supporting  Member  States  in  addressing 
health  workforce  shortages,  such  as  health  workforce  planning  models  as  well  as  fair  and 
sustainable labour mobility schemes with countries of origin to attract care workforce to the 
EU, including under Talent Partnerships. 

The Commission is strengthening the territorial dimension of the European Pillar of Social 
Rights through recent EU level territorial strategies,7 and is preparing a Strategy for Outermost 
Regions, and a Strategy on the Right to Stay, with a particular focus on improving access to 
opportunities and essential services so that people can thrive in the place they call home. 

Inequalities start early in life and accumulate over time. Persistent inequalities in education, 
compounded  by  underinvestment  and  teacher  shortages  in  disadvantaged  areas,  continue  to 
limit social mobility and economic potential.  

Inequality  is  not  only  about  today’s  outcomes,  but  also  about  fairness  throughout 
generations8. Reducing the transmission of inequalities across generations requires policies 
that intervene early on and prevent the accumulation of disadvantages over the life course. The 
Strategy  on  Intergenerational  Fairness  promotes  a  stronger  long-term  perspective  in 
policymaking and giving greater weight to the views and concerns of young people. Balanced 
with  the  need  to  ensure  long-term  fiscal  sustainability,  adequate  and  well-targeted,  place-
based  and  person-centred  social  investment  helps  prevent  the  accumulation  of  social 
disadvantages and reduces long-term fiscal and economic costs. The strengthened European 
Child  Guarantee,  and  the  new  EU  target  on  improving  the  basic  skills  of  disadvantaged 
learners  are  key  tools  to  address  these  challenges.  Furthermore,  broad  access  to 

7 These  include  the  EU Agenda  for  Cities,  the  Communication  on  the  EU’s  eastern regions  bordering  Russia, 
Belarus and Ukraine, and the EU Strategy for Islands. 
8 The Joint Research Centre supports this strategy with a monitoring tool (to be officially launched in September) 
allowing tracking how different age groups are currently doing in terms of economic, social, environmental and 
societal resilience. The tool also allows assessing evolution of life conditions over time, by comparing current 
conditions to those of the same age groups in the past. 

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supplementary pensions can help maintain adequate pensions for future retirees, particularly 
considering the effects demographic change in the Union will have on households.9  

Actions:  

•  The  Commission  will  provide  further  support,  in  particular  for  SMEs,  in 

implementing the Pay Transparency Directive. 

•  The Commission will take stock of available indicators to monitor socio-economic 

inequalities and social mobility, in cooperation with the Member States. 

•  The Commission will provide guidance on inclusive hiring practices through the 

EU Platform of Diversity Charters. 

• 

In line with the commitments made under the Union of Skills, the Commission is 
developing an Education Package to support Member States in improving school 
education performance and a Vocational Education and Training (VET) Strategy 
to make VET systems more attractive, innovative, and inclusive. 

•  The Commission is working on the Right to Stay Strategy, with particular attention 

to addressing territorial disparities in access to essential services. 

•  The upcoming EU Youth Strategy for the post 2027 period will aim to ensure that 
all young people have the opportunities to  realise their  full  potential in  a  fair and 
inclusive manner (2027). 

4.  Making social rights a reality for all – relaunching the collective effort 

4.1. Simplification, implementation and enforcement  

As social and employment challenges evolve, the EU social acquis must remain effective, 
accessible  and  easy  to  implement,  while  fully  preserving  the  rights  and  standards  that 
underpin the European social model. In line with the Commission’s commitment to simplicity 
by  design,  future  initiatives  will  continue  to  integrate  simplification,  implementation  and 
enforcement  considerations  from  the  outset,  while  preserving  rights  and  protections.  The 
Commission is committed to proactively and meaningfully reducing the administrative burden 
on  businesses,  workers  and  citizens,  while  upholding  social  standards.  To  this  end,  it  will 
identify  implementation  challenges  through  the  European  Semester  and  work  closely  with 
Member States and stakeholders to facilitate the effective application of the EU social acquis. 
The  forthcoming  Fair  Labour  Mobility  Package  will  contribute  to  these  objectives  by 
promoting  simpler,  fairer  and  more  effective  rules  for  labour  mobility,  including  for  cross-

9  In  this  regard  the  Commission  adopted  in  November  2025  a  supplementary  pensions  package  with  a  set  of 
legislative and policy measures designed to boost private and occupational retirement savings across the EU to 
help ensure adequate retirement income. 

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border workers, while strengthening enforcement and supporting the proper functioning of the 
Single Market. 

The Commission is strengthening efforts to ensure that the social acquis remains fit for 
purpose. This includes stress-testing existing legal frameworks and continuing implementation 
dialogues with  stakeholders  and social partners as appropriate,  in  order to identify practical 
obstacles to implementation and opportunities for simplification. Future initiatives, such as  the 
Fair Labour Mobility  package  and certain  elements  in  the Quality  Jobs Act, will  contribute 
tangibly to simplification and to supporting the proper functioning of the Single Market, while 
strengthening workers’ rights, including cross-border workers, enhancing the enforcement of 
social and labour legislation, and combating unfair competition and social fraud and abuse. In 
2027  the  Commission  will  review  the  implementation  of  Directive  (EU)  2019/1152  on 
transparent and predictable working conditions in the European Union.  

In line with the 2025 Pact for European Social Dialogue, the Commission will continue to 
strengthen cooperation with social partners, whose role remains essential in both the design 
and implementation of labour market policies. Civil society organisations will also remain key 
partners  as  they  play  a  vital  role  in  shaping  inclusive  employment  and  social  policies  by 
amplifying  marginalised  voices,  monitoring  implementation  gaps,  and  fostering  grassroots 
innovation.  Work  will  continue  with  EU  agencies  to  support  implementation,  evidence 
gathering and monitoring. Existing governance structures and cooperation mechanisms will be 
further leveraged to facilitate the exchange of good practices and improve policy delivery. 

4.2 Coordination, funding, and monitoring for social and employment priorities 

As Member States work to align their national strategies, reforms and investments with the 
European Pillar of Social Rights and the 2030 headline targets, coordinated action, optimised 
use  of  EU  funding,  and  rigorous  monitoring,  including  at  sub-target  level,  are  essential  to 
ensure tangible progress. 

The European Semester and the 2026 Employment Guidelines provide a clear roadmap and 
their delivery requires strong investments and data-driven policy-making. The 2026 European 
Semester cycle marked the second year of implementation of the new EU economic governance 
framework,  in  which  the  Pillar  is  firmly  embedded.  The  new  framework  enabled  a  deeper 
integration of economic, employment, education, skills and social policies within the Semester 
process, including through the introduction of a Social Convergence Framework. This stronger 
policy  integration  reflects  the  role  of  social  reforms  and  investment  as  drivers  of  inclusive 
economic growth, productivity and competitiveness. Moreover, the 2026 European Semester 
cycle marked an important shift, looking at competitiveness even more acutely through the lens 
of people. It introduced the first-ever Human Capital Recommendation. The Semester has also 
provided a comprehensive analysis of affordable housing policies and of job quality challenges, 
based on the updated EMCO monitoring framework. The Commission calls on Member States 
to implement their country specific recommendations. 

To further enhance the effectiveness of policies at EU and national level, policy evaluation and 
design need to rely on reliable and adequate data. To this end, efforts will be made to establish 

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an EU administrative data platform ensuring improved access and allowing for secondary 
use of employment, social security and taxation data for policy analysis, evaluation, research 
purposes and monitoring. The use of these data can be more efficient, less costly and timelier 
than alternatives, such as survey data. 

Moreover, the Commission calls on Member States to make optimal use of existing and future 
EU funding instruments, ensuring that resources are directed toward priority areas such as skills 
development, social protection, labour market inclusion, and just transitions.   

In the context of NextGenerationEU following  the COVID-19 pandemic, the Recovery and 
Resilience  Facility  (RRF)  has  supported  Member  States  in  implementing  reforms  and 
investments addressing access to quality education, employment, and care, and contributing to 
equal opportunities and social inclusion, with more than EUR 144 billion allocated to social 
objectives.  

With an EU budget of EUR 94 billion (EUR 139 billion when national cofinancing is included), 
the European Social Fund Plus  (ESF+) remains a cornerstone for  supporting initiatives that 
promote  employment,  education,  and  social  inclusion.  Its  current  funding  period  has  been 
programmed following the Pillar principles, and as such, it is the main instrument to support 
the implementation of the Pillar. The funding objectives mirror the three chapters of the Pillar 
and the minimum spending thresholds reflect strong commitment towards the delivery of the 
Pillar principles.  

The European Regional Development Fund (ERDF) also supports these efforts by financing 
investments in infrastructure and equipment and cooperation across borders to support access 
to  quality  and  inclusive  services. Additionally,  the  Social  Climate  Fund,  financed  with  the 
revenue from the sale of the ETC allowances, will continue to play a crucial role in mitigating 
the  potential  social  impacts  of  the  new  emission  trading  system  (ETS2)  for  buildings,  road 
transport  and  additional  sectors,  ensuring  that  vulnerable  households,  vulnerable  transport 
users  and  micro-enterprises  are  supported  as  the  EU  moves  towards  climate  neutrality. 
Moreover, Erasmus+ features horizontal priorities on the green and digital transitions and is a 
key instrument for building the knowledge, skills, and attitudes on climate change, supporting 
sustainable development, as well as digital education and skills.   

During  the  current  programming  period,  the  Technical  Support  Instrument  (TSI)  has  also 
supported Member States, on demand, in the design and implementation of reforms relevant to 
the European Pillar of Social Rights, including in areas such as labour-market policies, skills 
the  digitalisation  of  public 
governance,  social  protection,  healthcare  policies,  and 
administrations. In the remaining period of the 2021–2027 TSI cycle, targeted technical support 
can continue to support Member States strengthen the administrative and institutional capacity 
needed to implement Pillar-related reforms.  

Member States are urged to leverage all funding opportunities to their fullest extent, both under 
the current programming period and within the proposed National and Regional Partnership 
Plans in the next long-term EU budget.  

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Beyond  direct  funding,  Member  States  should  explore  opportunities  to  crowd  in  private 
investment  under  InvestEU  and  the  future  European  Competitiveness  Fund,  scaling  up 
innovative  solutions  that  align  with  the  objectives  of  the  Pillar.  Public-private  partnerships, 
blended  financial  instruments,  and  budgetary  guarantees  can  serve  as  powerful  levers  to 
mobilise additional resources, amplifying the impact of EU funding and fostering sustainable, 
market-driven solutions. 

5.  Conclusion 

The full implementation of the European Pillar of Social Rights is not just a Union imperative 
–  it  is  a  strategic  advantage,  driving  opportunity  and  empowerment  and  enabling  its 
competitiveness.  

The Commission calls on all partners to intensify joint efforts and fully deliver on the European 
Pillar of Social Rights, as well as the 2030 policy targets for the Member States and the Union. 
This demands targeted and long-term funding, strategic as well as policy reforms and measures 
that generate lasting economic and social returns.  

The Pillar has stood the test of time and remains the compass of a strong and resilient 
social Europe. Its 20 principles help to strengthen Europe’s social market economy, which is 
a beacon of hope for many as our labour markets and societies go through fundamental changes. 
We must give greater visibility to social rights and reinforce the assessment of social standards 
and upward social convergence, at a time when our Union is facing  major challenges. With 
2027 marking the 10th anniversary of the Pillar’s proclamation, it is a key moment to accelerate 
its  implementation  and  underline  the  commitment  to  continue  to  anchor  a  strong  social 
dimension in the present and future of the European Union.  

In times of deep and fast transformation, the Pillar – and Europe‘s social dimension as a whole 
–  is the strongest definition of the EU’s values and what holds us together. The Pillar provides 
the  necessary  safety  nets  and  a  clear  and  resilient  framework  to  anticipate  and  manage  the 
changes  brought  by  AI  and  technological,  demographic  and  geopolitical  transformations. 
Reinforcing its implementation is a joint responsibility that starts at national, regional and local 
level, with a key role for social partners and civil society. Therefore, while fully respecting and 
embracing  the different  approaches across Europe, we need to  step up  action,  asserting our 
common  values  and  recommitting  to  the  Pillar’s  20  principles  and  rights  to  bring  the  best 
opportunities for people, economy and society as a whole. 

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