Abstract
Transposition of the much-debated EU Directive on adequate minimum wages, adopted in October 2022, was due by November 2024. This article examines how the Minimum Wage Directive has (re-)shaped minimum wage and industrial relations policies in Bulgaria, Ireland, Italy and the Netherlands in the period immediately after its adoption. Distinguishing between different ‘usages’ of EU policy, I find that decision-makers and stakeholders have employed the Directive to reframe and reconceptualise questions of low pay and collective bargaining, and to raise political awareness of them and legitimate reforms previously considered to be unfeasible or inappropriate. At the same time, while the Advocate General’s opinion for annulment casts a shadow over the Directive’s future, its translation into meaningful regulatory and policy change (especially to promote collective bargaining) remains inextricably connected to – and dependent on – domestic political strategies and power relations.
Introduction
In October 2022, the European Union adopted the much-discussed Directive (EU) 2022/2041 on adequate minimum wages (hereafter: the Minimum Wage Directive). In view of the subject’s political and legal sensitivity, this Directive has attracted considerable interest, confusion and controversy among scholars, stakeholders and decision-makers (Müller and Schulten, 2022; Ratti et al., 2024). Many have characterised this instrument as reflective of a ‘paradigm shift’ in EU policy away from the prescriptions of wage moderation and collective bargaining decentralisation during the years of the Euro crisis. Studies have unpacked how the Minimum Wage Directive came about, pointing to changing lines of political conflict in the EU (Natili and Ronchi, 2023) and the strategic agency and pressure exerted by the Party of European Socialists (PES) and the European Trade Union Confederation (ETUC) in the agenda-setting and decision-making process (Schreurs and Huguenot-Noël, 2025).
But what about the impact of the Directive, which Member States were supposed to transpose by November 2024? Initially, one might be sceptical about the ramifications of the Minimum Wage Directive for minimum wage formation and collective bargaining at the national level. Because its key provisions are flexible and impose an obligation of effort rather than result on the Member States, Ratti (2024: 117) has described the Minimum Wage Directive as a procedural regulation that is ‘hard on the inside’ but ‘soft on the outside’. Preliminary observations suggest, however, that the Minimum Wage Directive has left a meaningful, if often modest mark on the policies of different Member States (Maccarrone, 2024; Müller, 2024; Vacas-Soriano and Aumayr-Pintar, 2025). At the same time, we still lack a more systematic, theoretically guided examination of the link between the Directive and recent changes in national law and practice.
To provide a more in-depth understanding of the implications of the Minimum Wage Directive for the position of low-wage workers and the future of social dialogue across the EU, this article examines and compares its implementation and transposition in four Member States with markedly different minimum wage fixing and industrial relations systems: Bulgaria, Ireland, Italy and the Netherlands. Drawing on policy documents, secondary literature and interviews with policy-makers and stakeholders, I explore whether and how the Minimum Wage Directive has prompted changes in the legal and policy framework around minimum wages or collective bargaining in these countries. In examining these avenues of influence, the article takes a theoretical perspective that highlights different ‘usages’ of the cognitive, strategic and legitimating resources provided by the EU (see Section 3). In the next section, I sketch the origins and contents of the Minimum Wage Directive, as well as the problems and potential of implementation.
The Minimum Wage Directive: background, substance and potential
The Directive on adequate minimum wages has rapidly become a cause célèbre in EU social policy, attracting attention and controversy among scholars, politicians and stakeholders. Trade unionists and social democrats had long floated the idea of a common wage policy, but legal concerns haunted such discussions, as Article 153(5) TFEU excludes ‘pay’ from EU regulation. In response to demands from socialist MEPs and ministers after the proclamation of the European Pillar of Social Rights, the Commission put forward a legislative initiative in October 2020. The Council and Parliament adopted the Directive in October 2022, following heated political discussions, as well as pressure from the PES and the ETUC (Schreurs and Huguenot-Noël, 2025). In March 2023, Denmark (joined by Sweden) brought the matter to the Court of Justice, arguing that the Minimum Wage Directive breached the principle of conferral. In his opinion of January 2025, the Advocate General (AG) maintained that it should be annulled, prompting another wave of scholarly debate (for example, Brameshuber, 2025; Kilpatrick and Steiert, 2025). 1 Pending the Court’s final judgment, the Directive remains in force and must be transposed by Member States.
In terms of legal substance, the Minimum Wage Directive rests on two pillars. Articles 5–8 outline procedural obligations to ensure the adequacy of statutory minimum wages (SMWs), where these exist. To set and update statutory minimum wages, Member States are required to use criteria that contribute to a decent living standard and reduced in-work poverty (at least including their purchasing power, wage distribution, wage growth and productivity developments), as well as indicative reference values to guide the assessment of their adequacy (such as 60 per cent of the median wage and 50 per cent of the average wage, or other values used at the national level). Updates have to take place biannually, or every four years where an automatic indexation mechanism exists. The social partners need to be involved in these processes. Variations and deductions from the statutory minimum wage must be proportionate and non-discriminatory. The Directive also requires that Member States enhance workers’ access to statutory minimum wages, for example, through improved inspections, although it lacks ‘clear targets for enforcement or for the strengthening of capabilities’ (Aranguiz and Bednarowicz, 2024: 260).
The other pillar of the Directive is related to wage setting through collective bargaining. Many experts have described this as the more impactful aspect in the long term (for example, Müller and Schulten, 2024). Article 4 obliges Member States to reinforce the social partners’ bargaining capacity, encourage meaningful negotiations (including through access to appropriate information), protect exercise of the right to bargain and protect workers and their representatives from retaliation. Where collective bargaining coverage is below 80 per cent, governments are required to put in place ‘enabling conditions’, as well as an action plan with a timeline of measures to increase coverage, to be reviewed at least every five years. The Minimum Wage Directive also includes notable horizontal provisions, such as the need to collect and report relevant data to the Commission every second year (Article 10) and ensure that information on statutory minimum wages and/or collectively agreed wages is easily accessible (Article 11).
Notably, the Directive leaves the Member States ample discretion, for example, in the use and selection of criteria and indicative reference values to assess and update statutory minimum wages, and lacks specific requirements to promote sectoral (rather than firm-level) bargaining. Ratti (2024: 117) concluded that ‘its impact is mainly procedural and its enforcement largely left to the effectiveness of domestic labour legislation, including collective agreements.’ This ‘soft’, procedural character of the Directive makes it all the more interesting (and complex) to study its impact on different national regimes. Whereas Menegatti (2021) and others cautioned against entertaining substantial expectations, some recent investigations point to non-trivial policy changes in the wake of the Directive, notably through the introduction of adequacy thresholds in minimum wage legislation (Maccarrone, 2024; Müller, 2024). But to what extent can we attribute such outcomes to the Minimum Wage Directive? And should we expect these effects to endure after the Directive’s potential annulment? In the next sections, I elaborate on a theoretical approach and research design to analyse these dynamics of influence.
Beyond compliance: usages of social Europe
A long thread of EU scholarship has sought to assess the impact of directives – in labour law or beyond – in the Member States and to unpack the mechanisms behind their implementation. In the late 1990s and early 2000s, the ‘goodness of fit’ hypothesis emerged as a central explanation of (non-)compliance: the degree of ‘(mis-)fit’ of EU legislation with domestic policies and institutions would determine whether a government would implement a directive quickly and correctly (for example, Börzel and Risse, 2003). However, critics pointed to its empirical shortcomings and highlighted its neglect of domestic decision-makers’ preferences and beliefs (Falkner et al., 2005).
In some cases, ‘goodness of fit’ might be difficult to define and measure in the first place. Indeed, EU labour law has long favoured ‘hybridity’, combining mandatory standards with soft policy guidance (Kilpatrick, 2006). The Minimum Wage Directive is a case in point. In such cases, we may discern different ‘logics of reaction’ to flexible EU legislation, ranging from a minimalist approach – in which Member States use all possible exemptions and avoid over-implementation – to a maximalist logic in accordance with which ‘governments become inclined to follow the EU’s recommendations systematically and transform them into hard national provisions’ (Falkner et al., 2005: 178). More frequently, national governments will follow a ‘logic of domestic politics’, which reflects their case-specific priorities and the positions of relevant interest groups. However, this useful typology does not tell us how domestic political and societal actors use flexible European legislation to instigate (or prevent) policy adjustments.
To better understand the open-endedness of such processes, we can draw on the more recent Europeanisation literature, which has studied the broader ramifications of EU policy beyond legal compliance (Graziano et al., 2011). Woll and Jacquot (2010: 116) developed the concept of ‘usages of Europe’, that is, ‘social practices that seize the European Union as a set of opportunities, be they institutional, ideological, political or organizational’. Politicians, experts and civil society invoke these (for example, legal, budgetary, normative) resources afforded by European integration to trigger policy change. EU policy outcomes are shaped by interactions across levels of governance, diverse actor networks and informal procedures based on different usages of such resources.
Woll and Jacquot (2010) distinguish three types of usage that can guide our study of the impact of the Minimum Wage Directive. First, cognitive usages occur as European integration induces actors to rethink political questions and helps them persuade others. EU policy networks or epistemic communities can introduce new ideas and knowledge that prompt actors to reinterpret problems and solutions, for example, through monitoring, learning and diffusion of best practices (Sabel and Zeitlin, 2008). Conversely, strategic usages ‘refer to the pursuit of clearly defined goals by trying to influence policy decision or one’s room for manoeuvre, helping to aggregate interests and to build coalition[s] of heterogeneous actors’ (Woll and Jacquot, 2010: 116). In this way, political and societal actors can use EU policy to mobilise resources in a given (partisan or distributive) conflict. The Minimum Wage Directive itself is suggestive of the strategic opportunities that the labour movement can seize in the integration process (Schreurs and Huguenot-Noël, 2025). Finally, the EU provides legitimating usages of resources, on which actors rely to deliberate and justify their decisions in the public space. For example, decision-makers may point to the authoritative (legal) requirements that they have to follow to ensure compliance with what ‘the Commission’ demands (and avoid sanctions) to legitimate a course of action.
In practice, the lines between these different usages may be thin, and they can well occur at the same time. Nevertheless, they indicate distinct mechanisms of policy change that should help us understand how – if at all – the Minimum Wage Directive is translated from a container of broad normative prescriptions into more tangible realities at the (sub-)national level (see Ferrera et al., 2023).
Research design: case selection and empirical strategy
To gauge the ramifications of the Minimum Wage Directive for minimum wage formation and collective bargaining at the national level, this article examines its implementation in four cases. Following a most-different case selection, I look, in order, at the Netherlands, Ireland, Italy and Bulgaria. This is a mixture of smaller and larger Member States, which represent the four ideal-typical worlds of industrial relations identified by Visser (2009) and ‘score’ differently on the core policy dimensions of the Minimum Wage Directive, namely collective bargaining coverage, the relative level of the statutory minimum wage and the prevalence of in-work poverty (see Table 1). 2 Given these differences, we may expect the implementation of the Minimum Wage Directive to follow dissimilar trajectories across the cases.
Overview of country cases.
Note: * Primary data suggest that coverage in Italy is closer to 80 per cent (see Orlandini and Meardi, 2023).
Sources: OECD data on statutory minimum wages for 2023; Eurostat data on in-work poverty for 2023; OECD-AIAS ICTWSS data on collective bargaining coverage for 2017 (Ireland), 2018 (Bulgaria) and 2019 (the Netherlands and Italy).
This article faces the methodological challenge of distinguishing the impact of the Directive from broader political-economic trends, already highlighted in Falkner et al.’s (2005) study of compliance with EU labour law. To mitigate this predicament, this article does not simply compare the status quo before the Minimum Wage Directive’s entry into force with the situation after transposition, but traces its implementation processes in-depth. To do so, I draw on policy documentation, secondary literature, media coverage and 11 interviews with involved policy-makers and stakeholders (see Annexe 1). After briefly sketching developments in minimum wage policy and collective bargaining in the past decade, I examine how (if at all) political and societal actors have leveraged the provisions of the Directive in the formal process of implementation, as well as in broader policy debates.
Case studies: unpacking the implementation of the Minimum Wage Directive
The Netherlands: the politics of minimalistic implementation
The debate on (minimum) wage adequacy emerged slowly in the Netherlands prior to the Minimum Wage Directive. From the mid-2010s, country-specific recommendations issued within the framework of the European Semester asked the Dutch government to promote higher (real) wage growth in order to combat its large current account surpluses, but such advice initially fell on deaf ears (D’Erman et al., 2022). In 2018–2019, the largest Dutch trade union (FNV) stepped up its campaign to raise the statutory minimum wage – with a demand for €14 per hour – in view of its declining adequacy relative to the median. The statutory minimum wage is indexed automatically, every six months, in line with contractual (that is, collectively bargained) wage growth. Because earned wages have outpaced collectively agreed wages, however, their relative adequacy has slipped from above 60 per cent to below 40 per cent of the median wage (Been et al., 2021). By the time of the 2021 elections, almost all political parties followed the unions’ demand for a minimum wage increase (Kloosterboer, 2024). In 2022, a near-unanimous parliament agreed to convert the monthly statutory minimum wage into an hourly minimum, based on a 36-hour week, implying an automatic raise for those working 38 or 40 hours a week. Later that year, in the wake of high inflation, the centre-right government decided on the first-ever extraordinary increase of the statutory minimum wage, by 8.05 per cent.
While the Minimum Wage Directive did not cause these debates, it has provided policy-makers and stakeholders with further direction. Every four years, the minister is required to evaluate, in consultation with the social partners, whether circumstances (for example, differences between earned and contractual wages, or between low- and high-paid workers) justify an additional adjustment of the statutory minimum wage. 3 Earlier iterations had been criticised for doing too little to assess whether the statutory minimum wage was set at a desirable level. In its 2023 evaluation, the ministry specifically examined its adequacy and incorporated the quantitative criteria of the Minimum Wage Directive, paying attention to purchasing power, the wage distribution and the potential effects of uprating the statutory minimum wage (Ministerie van Sociale Zaken en Werkgelegenheid, 2023). In line with its policy of tax breaks and allowances for low-wage earners to compensate for the declining adequacy of the statutory minimum wage, however, the ministry continued to emphasise the importance of net wages.
When the ministry initiated the transposition of the Minimum Wage Directive in late 2023, it opted for ‘pure implementation’, that is, with no changes other than ‘strictly necessary’. Officials argued that the automatic indexation mechanism and the additional benchmarks to evaluate the statutory minimum wage were in line with the Directive, but proposed to legally codify the quantitative criteria and include a reference to long-term productivity trends. The government also proposed to prohibit the adverse treatment of workers who seek to enforce their right to a statutory or collectively agreed minimum wage. 4
Indicative reference values to assess the adequacy of the statutory minimum wage were to be developed in consultation with the social partners and adopted by ministerial decree. Initially, the Ministry suggested three yardsticks: the net disposable income of full-time minimum wage earners should be 128 per cent of the cost of living, the gross minimum wage should be 54 per cent of the median wage, and no more than 11.7 per cent of minimum wage earners should feel that it is ‘difficult to get by’. These proposals attracted criticism for amounting to ‘a kind of reverse engineering’ and ‘reasoning towards a desired outcome’ [NL-EMPL1; NL-PARL2]. Unions and employers alike rejected the third benchmark as ‘too subjective’ [NL-TU1; NL-EMPL1]. While the 128 per cent benchmark was retained, the minister settled on 50 per cent of the median (!) wage in order to avoid ‘difficult conversations’ with the Finance Ministry about potential budget demands. Earlier that year, the incoming right-wing coalition voted down a planned additional increase in the statutory minimum wage by 1.2 per cent.
As the government opted for a ‘pure’ transposition and MPs recognised the ‘flexible’ nature of the Minimum Wage Directive, political engagement was limited. The centrist coalition partner New Social Contract (NSC) – which had campaigned on ‘economic security’ and committed in its manifesto to using implementation of the Directive to ‘recalibrate’ the statutory minimum wage – regarded this as a ‘missed opportunity’ [NL-PARL1]. However, only the GreenLeft–Labour Party alliance and the Socialist Party were openly critical of the government’s interpretation of the Directive. 5 In collaboration with FNV, these left-wing parties tabled a number of proposals, notably to legally codify a reference value of 60 per cent of the gross median wage, prohibit deductions for housing costs and do away with the sub-minimum wage for over-18s [NL-PARL2]. While these initiatives failed, the parliament agreed to ask the government to use all four criteria in the four-yearly evaluation of the statutory minimum wage and examine the effects of the youth minimum wage. While the Senate was expected to adopt the law in February 2025, the AG’s opinion prompted a majority of right-of-centre and Eurosceptic parties to postpone the vote ‘until there is complete clarity about the EU’s competence’ in this matter. 6
Despite this delay, the Social Affairs Ministry followed up on its commitment to evaluate the effects of the youth minimum wage and published a report in March. While repeating its view that this variation on the statutory minimum wage was not in breach of the Directive, it identified four policy options to improve its adequacy, by increasing and/or abolishing the rates for different age categories (Ministerie van Sociale Zaken en Werkgelegenheid, 2025). Following budget negotiations in April, the coalition agreed – at the instigation of NSC – to raise the level of the youth minimum wage for those aged 16 and above, for example, from 50 to 62.5 per cent of the statutory minimum wage for 18-year-olds, with effect from 2027.
As regards collective bargaining, the Dutch government did not propose measures in the legislative trajectory to implement the Minimum Wage Directive. Collective bargaining coverage in the Netherlands, while comparatively high, has fallen to a five-decade low. Trade union representatives have increasingly been refused access to workplaces in some sectors, and face growing competition from non-representative ‘yellow unions’ with few members and a near-total reliance on employers’ financial contributions (Oude Nijhuis, 2023). Trade unionists have advocated more action on precisely these questions, arguing that the present legal framework ‘failed the test’ of the Directive (FNV, 2024) [NL-TU1]. In its advisory opinion on the implementing law, the Council of State also emphasised the need to safeguard the independence of the social partners (Raad van State, 2024).
According to the Ministry, however, far-reaching measures would ‘not be suitable’ within the pure transposition of the Directive and would risk its ‘timely implementation’. Instead, this would need to wait for an ongoing exploration of ‘bottlenecks’ in the collective bargaining system and required a ‘fundamental conversation’ with the social partners (Ministerie van Sociale Zaken en Werkgelegenheid, 2024). Left-of-centre MPs proposed, again unsuccessfully, to regulate trade union access to the workplace. The ministerial exploration of the system of collective agreements is still ongoing, and it remains unclear how its results will feed into the action plan that the government will have to develop in consultation with the social partners. Employers do not yet have a ‘wish list’, but trade unionists are planning to insist on legal measures to address the questions of independence and access [NL-EMPL1; NL-TU1].
Ireland: anticipatory implementation and the politics of expertise
As regards minimum wage setting, scholars and officials agree that ‘Ireland is broadly in conformity with the standards of the Directive’ (Bell and Eustace, 2024: 475; Department of Enterprise, Trade and Employment, 2024). The Irish government reformed the minimum wage-fixing system in 2015, after the statutory minimum wage had remained unchanged since 2008, with even a reduction by 12 per cent in 2011 as part of the country’s bailout programme, though this was reversed six months later (see Maccarrone, 2024). This was to ensure that low-income earners would benefit from the recovery after the economic crisis. It followed the model of the British Low Pay Commission (LPC), comprising experts and social partner representatives, which makes annual recommendations to ensure progressive and incremental adjustments to a ‘fair and sustainable’ statutory minimum wage. The LPC uses clear wage-fixing criteria, such as changes in earnings, exchange rates, income distribution, (un-)employment and productivity trends, international comparisons and competitiveness. While the minister retains the final say, they have typically followed the LPC’s recommended increases.
Again, discussions about minimum wage adequacy predated the Minimum Wage Directive. In 2020, Ireland’s centrist government agreed to work towards a ‘National Living Wage’. According to some stakeholders, this commitment – absent from the parties’ electoral manifestos – reflected ‘a strategy to anticipate initiatives at the European level and [. . .] mitigate the need to do something more ambitious’ [IE-TU1]. The Directive was used explicitly to legitimate this objective (see also IGEES, 2024). Following the LPC’s (Low Pay Commission, 2022, 2023) recommendations, the statutory minimum wage was meant to reach 60 per cent of the median wage by 2026 and evolve towards a 66 per cent threshold thereafter. This choice met with consensus across the political spectrum, although a bill put forward by independent MPs to incorporate adequacy criteria into the existing legislation was defeated. 7 In April 2025, however, the government announced that the living wage would be delayed until 2029 in order to keep the required increases ‘sustainable’ for businesses against the backdrop of global economic uncertainty (McNally, 2025).
As in the Netherlands, the discussion around the Minimum Wage Directive put the question of variations on the statutory minimum wage on the agenda. In an evaluation requested by the minister, the LPC (Low Pay Commission, 2024) argued that the sub-minimum youth rate for under- and over-18s lacked the objective justification and evidentiary base that the Minimum Wage Directive requires, pointing out that cost savings for employers are not a ‘legitimate aim’ under EU law. Thus, it recommended that this variation be abolished after 2025. The government has since initiated an evaluation of the economic consequences of its abolition, but not yet committed to any concrete decisions.
The potential impact of the Minimum Wage Directive on Ireland’s quasi-voluntarist collective bargaining system is regarded as more far-reaching (Bell and Eustace, 2024; Eustace, 2024). While coverage has remained relatively constant (between 35 and 45 per cent), sector-level bargaining has faced recurrent challenges since the economic crisis, including significant pressure from the Troika for more (downward) flexibility of wage setting (Eustace, 2021; Maccarrone, 2024). In 2011, the High Court declared the system of Joint Labour Committees (JLCs) – through which parties in sectors with low union density could draft Employment Regulation Orders (EROs) that set minimum wages and working conditions, after adoption by the Labour Court – to be unconstitutional. A year later, the government recreated the JLCs, but provided that EROs should take into account competitiveness and employment and include opt-out clauses for employers in financial difficulty. In 2013, the Supreme Court annulled the system of binding agreements that sectoral parties could register at the Labour Court. This prompted the introduction of Sectoral Employment Orders (SEOs), which regulate wages, sick pay and pension schemes at the request of ‘substantially representative’ social partners through the Labour Court. At present, only three EROs and one SEO are in force.
In 2021, the government convened a high-level group (HLG) on collective bargaining under the auspices of the tripartite Labour-Employer Economic Forum (LEEF). Set up at the request of the social partners, this group was meant to find remedies for the High Court’s invalidation of the SEOs in 2020. However, it ‘was always looking to the Directive’. For trade unions, because of the constitutional hostility to collective bargaining in Ireland, ‘the best hope of progressing was if it was tied up with EU law, so they could point to its supremacy’ [IE-EXP1]. When the Supreme Court overturned the High Court’s ruling, the HLG began to look for ‘means by which plans and frameworks, developed by the social partners in conjunction with the State, [could] be put in place so that Ireland [would be] well-positioned to meet its obligations under EU law’ (Labour-Employer Economic Forum, 2022: 6). As its chair noted, the report ‘was very much completed in the “shadow of EU law”’ (Doherty, 2024: 219).
The HLG report contained several recommendations to promote sectoral and company-level bargaining. To incentivise employer engagement in JLCs, it proposed to enable trade unions to apply for a binding regulation of sectoral working conditions when employers refuse to participate in negotiations. The HLG also suggested a procedure for good-faith bargaining at the enterprise level, in which employers’ refusal to engage with representative unions in good faith – defined by a common code of conduct – could lead to intervention by the Labour Court and, following failure to comply, constitute a criminal offence. Public procurement and workplace access were explicitly not addressed in the report because of their complex and controversial nature [IE-EXP1].
To implement the report and prepare an action plan, the Irish government set up two LEEF working groups. Trade unions insisted that the two processes be kept separate, arguing that the Directive would require more far-reaching measures, for example, to guarantee union access to workers (and vice versa) and facilitate exercise of the right to collective bargaining [IE-TU1]. Conversely, employers’ organisations held that no legislative changes would be necessary (Oireachtas, 2024). IBEC supported the measures in the HLG report, as this gave them a degree of ‘control’ over the implementation of the Minimum Wage Directive, but they were less convinced of the need to reform the JLCs, which would not contribute to collective bargaining coverage under the definition of the Directive [IE-EMPL1; IE-EXP1]. 8
Despite this degree of ownership among the social partners, the government has not taken action. In October 2024, judicial advice concluded that no legislative changes were required to transpose the Minimum Wage Directive, and that some measures proposed by the HLG might be unconstitutional (Prendergast, 2024). Stakeholders anticipated that this attitude might change after the November 2024 elections, depending on the performance of Sinn Féin and other left-wing parties [IE-EMPL1; IE-EXP1; IE-TU1]. In the end, however, the centre-right topped the polls and formed another government. Still, the fact that the manifesto of liberal-conservative Fine Gael committed to developing an action plan to promote collective bargaining – and bring forward legislation ‘if necessary’ – suggests that the Minimum Wage Directive has ‘coalesced political momentum’ behind the goal of higher bargaining coverage (Eustace, 2024: 17). In April to May 2025, the government organised consultations on the issue, during which unions and employers repeated their (divergent) views, further kicking the can down the road (Prendergast, 2025a, 2025b). Meanwhile, trade unions are preparing to submit complaints to the Commission, as they have (successfully) done in the past, for failure to transpose the Directive [IE-TU1].
Bulgaria: social convergence limited by political instability
Since the mid-2010s, Bulgaria’s system of minimum wage setting – which was set by decree by the Council of Ministers, after consulting the National Council for Tripartite Cooperation – has been subject to criticism from trade unions, business and the European Commission (Tomev et al., 2019). If the social partners do not reach agreement (as has been the case since 2005), the Minister can take a unilateral decision, taking into account criteria such as the cost of living, the general level of wages, productivity and employment. To respond to domestic and EU criticisms regarding the limited involvement of the social partners and the lack of transparent wage-fixing criteria, 9 the government set up an expert group to reform the system. Because of disagreements between the social partners – especially over the upper threshold of the statutory minimum wage – this process stalled (Eurofound, 2020). Instead, the government continued to set the statutory minimum wage by fiat, which has led to the largest increases in its nominal and real value in the EU (after Romania), although it remains the lowest in absolute terms.
In mid-2020, anticipating an EU initiative, the government and social partners reopened the negotiations on a minimum wage-fixing reform, but to no avail (Dimitrov, 2021). In October 2022, the Bulgarian Socialist Party proposed an amendment to define the statutory minimum wage through an automatic indexation formula of 50 per cent of the average wage (calculated over the first half of the year and the second half of the previous year). The parliament expressed unanimous support for the proposal, with different parties invoking the Minimum Wage Directive – and the need to attract or retain (skilled) labour – to legitimate their position. 10 Trade unions had long supported such a target, but insisted on additional criteria attuned to the cost of living (to achieve a ‘living wage’) and social partner involvement, in line with the Directive (Makelova, 2024) [BG-TU1]. Employers’ organisations opposed the reform, however, writing to the Commission that it contradicted the Directive by undermining the role of social dialogue, and brought a case before the Supreme Court (Bulgarian Industrial Association, 2023) [BG-EMPL1]. Nevertheless, the reform came into force, raising the statutory minimum wage by nearly 20 per cent for 2024.
On paper, the Minimum Wage Directive offers an opportunity to address broader problems of collective bargaining and social dialogue, which have slowly been eroded after a rapid decline in the 1990s. At just below 30 per cent, coverage is somewhat higher than in other Central and Eastern European countries, but it is concentrated in the unionised ‘strongholds’ of the public sector and heavy industry (Kahancová and Kirov, 2021). Wage bargaining takes place predominantly at the company level; sectoral extension mechanisms exist, but are rarely used due to employer opposition. Most employers retain a negative attitude towards collective bargaining, while trade unions are often badly organised at the industry level and face obstruction at the company level. This, in turn, has ‘pushed trade unions to orient their wage policies towards minimum wage increases rather than collective bargaining’ (Kahancová and Kirov, 2021: 94).
So far, the Bulgarian government has taken few steps to implement the Minimum Wage Directive. In 2023, the Labour Ministry set up working groups of officials and social partner representatives, but these were disbanded because of recurrent political turmoil (Makelova, 2024). Trade unions have advocated measures to promote sector-level negotiations, for example, through representativeness criteria and recognition procedures, ‘looking into the traditions of Western countries for best practices’, and have explored the preparation of an action plan with the employers’ associations (Economic and Social Council, 2023) [BG-TU1]. However, these suggestions have found no resonance at the political level, except for the parliament’s decision to make actions against the right of association punishable by imprisonment or a fine, as unions had long been demanding (KNSB, 2023). In all other regards, the development of measures to promote collective bargaining remains a distant prospect.
Italy: local and judicial bypassing of national political blockades
Formally, Italy could be considered ‘immune’ to the requirements of the Directive. Minimum wage setting is regulated exclusively through collective bargaining, which – on paper – covers almost all private sector contracts (Orlandini and Meardi, 2023; Razzolini, 2024). However, the genesis of the Minimum Wage Directive coincided with a revival of the debate on low pay, driven by the advocacy of the populist Five Star Movement for a €9 gross hourly minimum wage. Upon entering government in 2018, the party secured a commitment to this issue, but it foundered on intra-coalition disagreements, first with the right-wing Lega, then with the centre-left (Parodi, 2020). In mid-2022, the Draghi government again promised action, drawing ‘inspiration’ from the European debate (Il Sole 24 ORE, 2022). With support from the trade unions, which were still opposed to a statutory minimum wage, labour minister Andrea Orlando announced a de facto extension mechanism for the most widespread sectoral agreements (Il Post, 2022). A week later, however, the government collapsed.
Even as the right-wing Meloni government took office, the Minimum Wage Directive provided trade unionists with an opportunity ‘to open a discussion with the executive and the legislator on the issue of low wages and in-work poverty’ [IT-TU2]. In its slipstream, the centre-left opposition sponsored several resolutions on ‘fair remuneration’ or variants on a minimum wage and, in mid-2023, united around a motion that again proposed a general extension mechanism, as well as a minimum threshold for collectively agreed base pay at €9 per hour. The initiative was backed by trade unions CGIL and UIL, whose positions became ‘a little more articulated, more complex’ after the adoption of the Directive [IT-TU2]. In October 2023, Italy’s highest judges took the ‘radical’ step of allowing the judicial review of collectively agreed minimum wages, even those negotiated by the most representative unions (Tursi, 2024). 11 According to the Supreme Court, this ‘adequacy check’ would be necessary to safeguard the constitutional principle of sufficiency and a dignified life, taking into account criteria such as the poverty threshold, wages in comparable sectors and the indicative references value of the Minimum Wage Directive (Razzolini, 2024).
There was little support for such initiatives among the government and parliamentary majority, however, which asked the tripartite National Council for the Economy and Labour (CNEL) – chaired by former conservative minister Renato Brunetta – to explore the low-pay question. Its report, adopted in October 2023, maintained that remuneration provided for in representative agreements should, in principle, be seen as adequate, and that the Minimum Wage Directive would require no major legislative adjustments (Consiglio Nazionale dell’Economia e del Lavoro, 2023). However, it did recognise a need to address ‘contractual dumping’ and ‘pirate agreements’ signed by non-representative unions or employer associations, for example, by collecting more reliable data and legislation to identify the most widespread sectoral agreements. The CNEL also suggested clarifying Article 36 of the Constitution (which provides for the right to a ‘dignified wage’) and an action plan to promote bargaining coverage, in particular of non-standard workers. CGIL, UIL, the federation of cooperatives and five independent members – who had proposed experimenting with regulated wage floors in ‘critical’ sectors – abstained or voted against the report, arguing that it lacked ambition or was ‘constructed to support the government position’ [IT-TU2] (Legacoop Produzione e Servizi, 2023; Sesto, 2023).
After removing all references to the minimum wage from the opposition proposal, the right-wing majority asked the government to take measures building on the CNEL report to promote ‘fair and equitable’ remuneration and improve enforcement (Vitale, 2023). Although critical of some aspects and divided over the future of minimum wage fixing, trade unions welcomed this as a ‘useful exercise’ to combat contractual dumping [IT-TU1; IT-TU2]. For over a year, however, this proposal languished in the Senate, until its examination was resumed in May 2025 (Redazione ANSA, 2025). Left-of-centre parties, following a national popular initiative, revived the proposal for a €9 minimum wage, again to be rejected by the parliamentary majority (Gagliardi, 2025). Circumventing the road of national politics, municipal and regional governments in Florence, Lazio, Naples, Puglia and elsewhere have taken the step of introducing an exemplary €9 wage floor for public procurement and concession contracts, legitimised with explicit reference to the Directive. 12
Discussion and conclusion
Nearly a year after the deadline for its transposition, what can we say about the impact of the Minimum Wage Directive? Has it been a ‘gamechanger’, as Müller and Schulten (2022) suggested, or has it rather amounted to ‘much ado about little’, as Menegatti (2021) anticipated? Of course, it might be too early to tell, especially after the AG’s opinion cast a dark shadow over the future of the Directive. Some of the recent reforms that may appear to follow from the Directive were already in the pipeline before its adoption and are only tangentially related to EU policy and law. Nonetheless, based on the case studies in this article, the Minimum Wage Directive has provided a ‘hook’ that helps policy-makers and stakeholders to put questions of wage adequacy and bargaining coverage (back) on the agenda and occasionally has even given an impetus to regulatory reform after years of slow erosion.
With regard to statutory minimum wage setting, the Minimum Wage Directive has elicited different degrees of policy change. Bulgaria has codified a binding reference value of 50 per cent of the average wage, while Irish decision-makers have committed to reaching 60 per cent of the median wage by 2026. In the Netherlands, legislative changes – which, however, have not yet been enacted – would give a more explicit role to decency-related criteria in the evaluation of the statutory minimum wage. In Ireland and the Netherlands, the sub-minimum wage for young people has come under the spotlight at both the technical and the political level. In Italy, there is no statutory minimum wage, but the Directive has sustained an ongoing debate on low pay.
When it comes to wage setting through collective bargaining, which is what many see as giving the Directive its real ‘punch’, its impact remains more ambiguous. In all the cases presented here – even in Italy, where coverage is notionally above the 80 per cent threshold – the Minimum Wage Directive has contributed to a revival of the debate on the future of collective bargaining. At the same time, governments have postponed legislative reforms, which not only appear politically less attractive than statutory minimum wage uprates, but touch on deep-seated concerns about existing industrial relations traditions and the autonomy of social dialogue. The action plan could provide an opportunity to deepen such debates, although none of the Member States covered in this article have so far specified how they intend to fulfil this requirement.
How, then, can we make sense of the patterns of reform across the four cases? First of all, the Minimum Wage Directive has spurred limited but meaningful cognitive usage. The role of expert bodies has been particularly pronounced in Ireland, where the LPC and the LEEF have actively engaged with the Directive to explore novel pathways for reform, from the abolition of sub-minimum wages to the reorganisation of collective bargaining. In Bulgaria, parties across the ideological spectrum welcomed a relative fairness threshold for the statutory minimum wage as part of a new, EU-approved economic strategy to attract skilled labour and combat poverty. In Italy, judicial actors have used the Directive as a resource to rethink the constitutional notion of ‘adequacy’. At the same time, the cases – such as the CNEL report – point to the politicisation of expertise and the limits of consensual problem-solving. It appears unclear whether political and societal actors in some of these Member States can overcome their differences to draft (and implement) an action plan to promote collective bargaining.
Indeed, the analysis is testimony to the invariable importance of domestic partisan politics and the strategic approaches to Europe that are associated with it. Trade unionists and left-of-centre politicians have actively sought to use the Directive to achieve pre-existing goals and preferences, often glossing over the discretion that it leaves to Member States. In this process, the Minimum Wage Directive has also fostered the consolidation of a transnational network, as trade unionists in different countries have shared information and experiences with one another, in particular via the channels of the ETUC’s Collective Bargaining and Wage Coordination Committee [IE-TU1; IT-TU1; NL-TU1; BG-TU1]. 13 The ETUC–ETUI ‘Wage-Up’ project stands out as an example that has facilitated the monitoring of trends and the exchange of best practices, while several trade union federations have actively reached out to their affiliates – in particular in Central and Eastern Europe – to share strategies.
In terms of legitimating usages, the Directive has been used as a justification both for meaningful reform and against it. With reference to its legal provisions and the Commission’s clarifications, employer organisations and right-wing parties argue that no changes to national law and practice would be required, while more centrist governments have proposed technical tweaks to existing legislation, in the hope of pre-empting more far-reaching reforms. Additionally, the AG’s opinion on the Directive has played into the hands of those who had been critical from the outset, most tangibly in the Netherlands, where it legitimised an indefinite delay in the implementation process.
For now, it remains to be seen how the Court rules, and – if the Directive is not annulled – whether the Commission, having evaluated its transposition, will demand further changes from Member States. Given the frequent discrepancy between compliance with EU law on paper and in practice, legal implementation is not all that matters. The ambitions of the Minimum Wage Directive will depend equally on instrumental and enforcement resources that can turn rights into lived realities (Ferrera et al., 2023). One crucial issue, in this context, is the presence of well-resourced labour inspectorates capable of monitoring compliance with statutory or collectively agreed wage floors and combating exploitation through effective sanctions. Future research could explore whether the EU’s new-found commitment to the right to fair and dignified pay will make much of a difference on the ground.
Footnotes
Annexe 1
Overview of interviews.
| Country | Affiliation | Code | Date |
|---|---|---|---|
| Bulgaria | Employers’ organisation | BG-EMPL1 | 18/1/2023 |
| Trade union | BG-TU1 | 11/7/2024 | |
| Ireland | Trade union | IE-TU1 | 30/5/2024 |
| Employers’ organisation | IE-EMPL1 | 8/10/2024 | |
| Expert | IE-EXP1 | 24/10/2024 | |
| The Netherlands | Trade union | NL-TU1 | 11/7/2024 |
| Employers’ organisation | NL-EMPL1 | 8/10/2024 | |
| Parliament | NL-PARL1 | 30/9/2024 | |
| Parliament | NL-PARL2 | 9/10/2024 | |
| Italy | Trade union | IT-TU1 | 30/4/2024 |
| Trade union | IT-TU2 | 10/9/2024 |
Funding
The author received no financial support for the research, authorship, and/or publication of this article.
1
Opinion of Advocate General Emiliou in Case-19/23 Kingdom of Denmark v European Parliament and Council of the European Union, ECLI:EU:C:2025:11.
2
While Visser’s typology predates the reforms of the crisis period, it is still frequently used and adequately captures the diversity of industrial relations and wage-setting regimes in Europe (Bosch, 2021).
3
The statutory minimum wage can be adjusted upwards, but it can also be revised downwards or frozen (as in 2004–2005) if wage developments are considered ‘excessive’ in terms of their impact on job growth and social security spending.
4
Originally, this provision referred only to the statutory minimum wage, but trade union officials insisted that this protection should cover collectively agreed minimum wages as well [NL-TU1] (FNV, 2024).
5
Tweede Kamer [lower house of the Dutch parliament], Wet implementatie EU-richtlijn toereikende minimumlonen (TK 8) 2 October 2024.
6
Eerste Kamer [upper house of the Dutch parliament], Voortzetting behandeling Wet implementatie EU-richtlijn toereikende minimumlonen, Verslag van de vergadering van 28 januari 2025 (2024/2025 nr. 16).
7
National Minimum Wage (Adequate Wages for Living) Bill 2024.
8
Responding to a question raised by Irish unions, the Commission clarified that EROs and SEOs are a form of statutory regulation and do not constitute collective bargaining (European Commission, 2023: 18).
9
Notably, Semester recommendations successively warned about planned statutory minimum wage increases, for example, noting that ‘[s]uch sharp discretionary shifts in the Government’s wage-setting policy could be distortive for the labour market’ (in 2015) and ‘may have a negative impact on employment and should, therefore, be monitored’ (in 2017).
10
Transcripts of plenary sessions, 48th National Assembly, 21st Session, 8 December 2022.
11
Court of Cassation, Nos. 27711, 27713 and 27769 of 2 October 2023.
12
National competence with regard to wage policy precludes subnational authorities from enforcing this minimum; instead, tender notices can require compliance with the wage floors provided for in the most representative collective agreement and/or award ‘bonus points’ to companies that comply with the €9 norm. Even these provisions, however, have prompted legal challenges from the government (Piglialarmi, 2025).
13
I would like to thank an anonymous reviewer for emphasising this.