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Scope and changes introduced by the European Pillar of Social Rights (Principle 6)
Description
The Pillar sets out the right to fair wages providing for a decent standard of living for all workers. Comparable rights are already included in the 1989 Community Charter of the Fundamental Social Rights of Workers,(55) one of the sources of Title X on Social Policy of the TFEU as well as in the (revised) European Social Charter.
The Pillar foresees a level of the minimum wage which takes into consideration both the needs of workers and their families and social factors such as the evolution of the standards of living and economic factors, which can include the level of productivity. The Pillar recognises the role of minimum wages in combatting poverty, while avoiding employment traps. This is with a view to boosting the incomes of poor families and providing a fair compensation from work for those at the bottom end of the wage distribution, thus also increasing their incentives to work. Other measures may include reducing the tax burden on low-wage earners and their families and supplementing income from work with effective social benefits.
The Pillar requires that all wages are set in a transparent and predictable way, in full respect of national practice, notably as concerns the right to collective bargaining of social partners and their autonomy. As concerns minimum wages, most Member States have a national statutory minimum wage. This is a regulatory instrument making a single wage floor legally binding for all employees. A few Member States do not have a statutory minimum wage and different wage floors are set by the social partners through collective agreements, often at sector level. The Pillar does not challenge in any way this diversity of practices and recognises the autonomy of the social partners. Within this context, transparency means that well-established consultation procedures should be followed when setting the minimum wage, leading to consensus between relevant national authorities and the social partners, and possibly building on input from other stakeholders and independent experts. In addition, the Pillar calls for ensuring the predictability of wage decisions, for example through the definition of rules such as adjustment to the cost of living for minimum wages.
The Pillar foresees a level of the minimum wage which takes into consideration both the needs of workers and their families and social factors such as the evolution of the standards of living and economic factors, which can include the level of productivity. The Pillar recognises the role of minimum wages in combatting poverty, while avoiding employment traps. This is with a view to boosting the incomes of poor families and providing a fair compensation from work for those at the bottom end of the wage distribution, thus also increasing their incentives to work. Other measures may include reducing the tax burden on low-wage earners and their families and supplementing income from work with effective social benefits.
The Pillar requires that all wages are set in a transparent and predictable way, in full respect of national practice, notably as concerns the right to collective bargaining of social partners and their autonomy. As concerns minimum wages, most Member States have a national statutory minimum wage. This is a regulatory instrument making a single wage floor legally binding for all employees. A few Member States do not have a statutory minimum wage and different wage floors are set by the social partners through collective agreements, often at sector level. The Pillar does not challenge in any way this diversity of practices and recognises the autonomy of the social partners. Within this context, transparency means that well-established consultation procedures should be followed when setting the minimum wage, leading to consensus between relevant national authorities and the social partners, and possibly building on input from other stakeholders and independent experts. In addition, the Pillar calls for ensuring the predictability of wage decisions, for example through the definition of rules such as adjustment to the cost of living for minimum wages.
Importance
High
Additional information
(55) The Community Charter of Fundamental Social Rights of Workers - December, 9th 1989.