In 2020, one in ten professionally active Europeans was at risk of falling into poverty, as a recent Eurostat study revealed. In Luxembourg, despite the €2,202 minimum wage, 11,8% of active adults incur this burden.

The EU parliament, in response to this, proposed a Europe-wide framework for minimum wages, a project and success for Luxembourg commissioner Nicolas Schmit (LSAP), who had pushed for a minimum wage.  

Some of the key strokes of the minimum wage framework will be minimum income workers’ access  to wage protection, with a regular and in-depth inspection of employers’ compliance with said protection. In addition, the mandate recommends a higher collective bargain coverage, aiming for more than 70% as this leads to higher minimum wages and fewer low-wage workers.

Furthermore, EU member states would have to put in place procedures to ensure an adequate and up-to-date minimum wage. Luxembourg, for instance, despite its comparatively high minimum wage, sees many low-income households struggle as more than half of their disposable income goes towards paying the high rent Luxembourg landlords impose.

The draft law, if agreed on, will demand reports to the EU commission every two years, to make sure that collective bargaining coverage, minimum wage rates and workers are respected in accordance with the framework.

Following the council’s approval of the mandate, it will be up to the parliament to decide on the final shape of the law text.