European minimum wage: Directive in the pipeline

As a result of the European debate on the minimum wage—ongoing for some years now and accelerated with the economic crisis caused by the pandemic—the EU Council and the European Parliament reached an agreement following the proposal for a directive presented on 28 October 2020.

The objective of the European Union is not to standardise national systems with the introduction of a single minimum wage for all states but, rather, to identify guidelines that define appropriate fair wages, contributing to an upward convergence without prejudice to the specificity and autonomy of each Member State.

Within this framework, the proposed legislation identifies the following areas of intervention:

  • in States where statutory minimum wages already exist (i.e. are identified by law or other binding legal provisions) the definition of clear criteria to determine and update them, also with the involvement of social partners (also accounting for purchasing power, cost of living, and the level and growth rate of wages and productivity);
  • in States where the percentage of workers covered by a collective agreement is below a certain threshold (unofficial figures put this at 80%), initiatives to promote bargaining;
  • tools for collecting and reporting wage data in order to monitor the coverage and adequacy of the protection provided by the minimum wage, both from legal and contractual sources;
  • provision of workers’ access to an effective and impartial dispute settlement system and a dissuasive sanctioning apparatus for violations.

This is still a work in progress: what will the next steps be?

The draft of the Directive still awaits an affirmative vote from the Parliament and ratification by the European Council, from then, Member States will have two years for its implementation through the adoption of national legislation.

Italy has no statutory regulation regarding the minimum wage, although several proposal to legislate on the matter were presented and are still under discussion. Currently courts use NCBAs minimum wages as a reference for fair pay.

The debate on the matter is lively, with politicians, legal experts and economists having differing and often discordant opinions not only on its introduction, but also on how it might be implemented. Let’s wait for developments in both national and European regulations to see where this leads.

By: Alessia De Concilio and Stefania Vitiello

Visit our Law Maps for an interactive map on minimum statutory pay. Click here. 

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