Directive 2022/2041 establishes requirements for European Union member states to update their minimum wage levels in line with prevailing market rates. First proposed in 2020, the directive seeks to reduce working poverty rates by introducing more robust minimum wage standards and to encourage more widespread collective bargaining. Following the directive’s recent approval by the Council of Ministers, member states should transpose it into national law by November 15, 2024.
The key provisions of Directive 2022/2041 include:
The directive doesn’t impose a uniform minimum wage level on member states or require the establishment of rates where they do not currently exist. The greatest practical impact is expected to be in those states where either existing rates are deemed “inadequate” under the directive’s standards or where collective bargaining coverage rates fall below the directive’s thresholds; however, due to the somewhat vague nature in which the directive determines “adequacy” while imposing few specific criteria or processes, it remains to be seen how member states will interpret certain provisions when transposing the requirements into national law. Among the 27 member states, six do not have statutory minimum wage rates while only eight have CBA coverage rates of 80% or higher (ILO data).
Note that the Danish government has opted to challenge the directive in the European Court of Justice (ECJ) as undermining the Danish social model for wage setting. The lawsuit has no immediate effect on the requirement for member states to transpose the directive unless the ECJ rules in favor of Denmark.
