Good news for employees receiving minimum wage throughout Europe. The minimum wage will increase. The two largest political groups in Europe, the Christian Democrats and the Social Democrats, have reached an agreement on the matter. Over 24 million employees in 25 of the 27 EU Member States will start earning more within two years (2023). Learn about the details in this blog.

How much?
The new minimum wage must meet a double threshold. It must be at least 60% of the median salary of a country (which means that half of the salaries will be lower, and half will be higher). It must also be at least 50% of the average salary in a country.

Background
The differences in minimum wage are significant in Europe. The 21 Member States with minimum wages can be divided into three groups. Ten Member States have a minimum wage lower than €700 per month. The minimum wage in the southern countries – Greece, Portugal, Malta, Slovenia, and Spain – is between €700 and €1,100 per month. The minimum wage in north-western Europe – France, Germany, Belgium, the Netherlands, Ireland, and Luxembourg – is over €1,500 per month. Of course, the differences are much smaller when considering the price differences in the various countries. If we do this, the highest minimum wage is over 2.5 times higher than the lowest minimum wage. Europe wants a decent minimum salary which enables someone to provide for a regular family, with an occasional treat.

Consequences
Studies have determined that increasing the minimum wage leads to less loss of employment (less than 0.5%). Small and medium enterprises benefit thanks to the increase in purchasing power. Labour migration will decrease slightly thanks to the new minimum wage. Exploitation of cheap labour migrants will hopefully also decrease.

Questions about the minimum wage in your country? Feel free to contact one of our member firms.

This blog was contributed by our member lawfirm De Koning Vergouwen Advocaten, Amsterdam, The Netherlands

Sources:
https://www.ad.nl/buitenland/nieuwe-wetgeving-minimumloon-miljoenen-europeanen-gaan-meer-verdienen~ac163fee/
https://www.ad.nl/werk/eu-wil-eerlijker-minimumloon-zoveel-verdien-je-minimaal-in-iedere-lidstaat~a4e60632/
https://www.europa-nu.nl/id/vlg2i6h0qjzm/nieuws/grote_verschillen_tussen_minimumlonen_in?ctx=vh6tqk1kv3pv&s0e=vhdubxdwqrzw