The eradication of poverty and social exclusion in Europe is currently at the forefront of the European Commission’s agenda.
The proposed directive establishing a framework for minimum wages, upon which proposal a political agreement was reached between the European Parliament and the EU member states last June, has now been bolstered by a recent proposal made by the commission for a council recommendation on adequate minimum income.
Whereas the scope of the proposed directive is that of establishing a framework for the adequacy of statutory minimum wages and enhancing employees’ rights to a minimum wage, the proposed council recommendation seeks to ensure adequate minimum income, that is social benefits, for those who need it most.
The proposed directive does not require member states to introduce statutory minimum wages. Nor does it set a common minimum wage level across the EU. It does, however, oblige member states which do provide for statutory minimum wages to put in place a sound governance framework for the setting and updating of such wages.
This includes, among others, clear criteria for minimum wage setting and the use of indicative reference values to guide the assessment of the adequacy of minimum wages, with the directive giving indications on possible values that could be used.
Regular and timely updates of minimum wages are also being proposed, with the role played by social partners in the setting and revision of such wages enshrined in the said directive.
The directive also seeks to promote collective bargaining in all member states, which is seen as playing a key role in adequate minimum wage protection.
All member states are obliged to enhance enforcement and monitoring, by taking measures to ensure that in public procurement or concession contracts, economic operators comply with the wages set by relevant collective agreements or with statutory minimum wages, if applicable.
The right to redress for workers is also being emphasised, obliging member states to set effective, proportionate and dissuasive penalties, for breaches of national legislative provisions on minimum wage protection.
On the other hand, the proposed recommendation focuses on adequate minimum income, that is, benefits granted to vulnerable households, usually on a means-tested basis, in order to ensure a decent livelihood.
It offers guidance to member states on how to ensure that their minimum income schemes are effective in fighting poverty and promoting active inclusion in society and labour markets.
Member states are being encouraged to use a robust and transparent methodology to set and adjust income support to an adequate level in a manner which is aligned with sustainable public finances
To this end, member states are being encouraged to use a robust and transparent methodology to set and adjust income support to an adequate level in a manner which is aligned with sustainable public finances.
The use of transparent and non-discriminatory eligibility criteria to receive minimum income, coupled with the use of less red tape when it comes to applying for and receiving minimum income, is also recommended.
Member states are being encouraged to focus on incentivising integration into the workforce by offering support to improve skills as well as support in job searching and maintaining a job such as, say, through mentoring.
The commission is recommending that this ought to be coupled with access to other essential services such as early childhood education, sanitation, energy, transport, financial services and digital communications.
Member states are also being urged to adopt a tailor-made approach depending on individual needs when it comes to the provision of such support packages.
To ensure that the requisite benefits reach the vulnerable at all times, it is recommended that the provision of minimum income should adapt to particular socio-economic crises, through, for example, a temporary easing of the eligibility criteria or by extending the duration of benefits.
It is envisaged that EU funding and technical support will continue to play a significant role in the provision and reform of social benefit schemes by member states. Both the proposed directive and recommendation should have an indirect positive impact when it comes to reducing the gender pay gap and assisting the re-entry of women into the workforce.
It is an established fact that women are usually at higher risk of poverty and social exclusion than men and it has been assessed that they have also been disproportionately impacted by the restrictive measures adopted in the fight against the COVID-19 pandemic by, for example, assuming a higher burden of informal care work.
Hence, the measures being proposed by the commission, particularly when it comes to access to essential services such as childcare, could assist the fairer sex in both re-entering the labour market and ensuring financial stability.
During these trying times for European citizens who are encountering sharp hikes in the cost of living, the action being taken by the commission may surely be said to be a step in the right direction.
Indeed, both the proposed directive and recommendation will possibly also leave the desired result of ensuring a level playing field among EU member states when it comes to setting minimum wages or providing social benefits.