Strengthening the minimum wage framework across the EU
The two co-legislative bodies of the European Union, the Council and the European Parliament, reached a political agreement this morning on an interim measure that introduces a new directive aimed at ensuring a sufficient minimum wage and improving living conditions for workers across all member states, regardless of where they live in the union.
The new regulation does not set a fixed universal minimum amount nor does it compel governments to implement interprofessional minimum wages. Instead, it creates mechanisms for upward adjustments of wages and works to reduce wage inequality. Once approved and transposed into national law, the directive will apply to all workers with an employment contract or relationship, except in countries where minimum wages are maintained exclusively through other means. In those states, such as certain contexts where collective agreements are the predominant mechanism, these provisions may not require immediate changes.
As of now, 21 of the 27 EU member states have a statutory minimum wage, with monthly levels ranging from approximately 332 euros in Bulgaria to 2,202 euros in Luxembourg. In six countries—Denmark, Italy, Cyprus, Austria, Finland, and Sweden—the minimum wage is set through collective bargaining systems. The European Commission views this bargaining framework as central to achieving higher wage levels across the union.
Strengthening collective bargaining
The agreement between the Parliament and the Council reinforces both sectoral and interprofessional collective bargaining. Member states where less than 80 percent of workers are covered by collective agreements will be required to develop action plans to broaden coverage gradually. This target is more ambitious than the initial joint position from last December, which proposed 70 percent coverage, a target that Denmark and Hungary opposed while Austria and Germany abstained.
Additionally, member states must involve social partners in shaping their strategy, report to the Commission on measures taken, and publish the plan publicly. One argument expressed by the employment commissioner, Nicholas Schmit, was that the Danish system and similar models will not be affected. He noted that Denmark’s approach is strong and should stay intact, while the directive aims to strengthen systems that work well, rather than weaken them. Schmit emphasized that the directive seeks to encourage and bolster successful collective bargaining without destabilizing proven frameworks.
National assessments
The new rules also require member states to evaluate whether their current legal minimum wage suffices to provide a decent standard of living, taking into account national socio-economic conditions, purchasing power, productivity, and long-term development. Countries may establish a mechanism to measure a basket of goods and services at real prices and apply internationally used indicative criteria such as 60 percent of the median gross salary and 50 percent of median earnings. Adjustments to the minimum wage must be non-discriminatory, proportional, and justified, for example to recover overpaid amounts or as ordered by a judicial or administrative authority.
The process remains politically sensitive and must be formally approved by both institutions and transposed into law within two years. By that time, many member states already operate monitoring and control systems to ensure compliance and to curb abusive subcontracting, fraudulent self-employment, unregistered overtime, or wage escalation. National authorities are also charged with guaranteeing the right of appeal and taking necessary measures to protect workers and union representatives whose rights have been violated.
Overall, the directive seeks to harmonize basic protections without erasing national variations that reflect local economic realities. It offers a path toward higher standards while preserving the most effective elements of each country’s wage-setting tradition. This approach aligns with a broader EU strategy to promote fair work conditions, reduce poverty risks among workers, and support sustainable economic growth across the single market, as noted in official commentary from the Commission and member state discussions. The emphasis remains on practical improvements, strong social dialogue, and transparent oversight to ensure that wage progress translates into real benefits for workers across Europe.