Minimum wage: What applies to its automatic upward adjustment –

The minimum wage in terms of its automatic adjustment – increase will be determined by four criteria, after the ratification by our country of the European directive on adequate minimum wages.

According to the conclusion of the scientific committee recommended by the Ministry of Labor in order to prepare the procedure for implementing the directive, the increase in the minimum wage will be determined by the following indicators:

See the Commission’s full conclusion here

• First, the purchasing power of wages, taking into account the cost of living.
• Second, the general level and distribution of wages.
• Third, the rate of wage growth.
• And fourth, long-term productivity levels.

The conclusion was delivered yesterday, Tuesday, October 8, to the Minister of Labor Mrs. Niki Kerameos by the scientific committee and then it was communicated to the social partners, in order to be informed and to have a dialogue before the submission of the relevant bill to the Parliament.

According to the conclusion there will be a gradual transition to the new minimum wage setting system following the example of France.

How does it come about?

In particular, the automatic adjustment is proposed based on a coefficient resulting from the following sum:

The annual percentage change in the consumer price index between July 1 of the previous year and June 30 of the current year for the bottom 20% of the household income distribution

And half of the annual rate of change in the purchasing power of the general wage index over the same time period.

If this factor leads to a reduction of the statutory minimum wage or the statutory minimum daily wage, no adjustment will be made.

It is also provided for the possibility of not making the above automatic adjustment of the statutory minimum wage and the statutory minimum daily wage in the event that the economy is in a significant recession.

The Commission of the European Union will monitor the implementation of the Directive based on a report submitted by each member state.

The report provides information on the following items:

1. With the rate and evolution of collective bargaining coverage.
2. The level of the statutory minimum wage and daily wage and the percentage of workers covered.
3. Description of the variations in the level of the statutory minimum wage and daily wage (to check the legitimacy of the variations and compliance with the principles of non-discrimination and proportionality) and the deductions to which they are subject (to check their adequacy).

Collective agreements

At the same time, the sanctioned directive gives particular importance to increasing the coverage of workers by collective labor agreements with the target of 80%. The coverage rate of collective bargaining in Greece is very low. The Directive requires an action plan to be drawn up to strengthen collective bargaining to determine wages, especially at sectoral or cross-sectoral level.

The action plan must be updated at least every five years and, if necessary, revised before the expiry of that period.

The preparation, updating and revision of the action plan is done after consultation with the social partners or in agreement with them or at the request of the social partners, as a product of their agreement.

The action plan is notified to the European Commission and made public. The content of the action plan is a national competence, but member states are subject to the scrutiny of the European Commission as to whether they are correctly implementing their obligation to strengthen collective wage negotiations.

Source: ot.gr