European countries established the minimum wage in order to prevent employees from being underpaid, ensure fair working conditions, sustain a functioning competition, and stabilize the social security systems. As an employer, it is important to keep an eye on the minimum wage as it influences the costs of the firm, especially when there is a presence in multiple countries with different legal systems with distinct employment laws. Additionally, the minimum wage varies as it is regulated in some countries and very often the amounts are adapted to the inflation rate and the general financial situation of the country.
In the following blog, the minimum wages of five different European countries are reviewed and explained.
The minimum wage in The Netherlands
The minimum annual wage (“minimumloon”) for full-time employees over the age of 21 is € 20.700 in the Netherlands. This increase came into effect on the 1st of January 2022. The amount depends on the age as well as the business which is why the amount can differ. In the Netherlands, the minimum wage is adjusted twice a year, in January and July.
The minimum wage in France
In France, the minimum annual wage is € 19.237,44 since the 1st of January 2022. For the “salaire minimum” in France, it is important to keep in mind that an average working week has 35 hours and not 40 hours such as other European countries reviewed in this blog.
The minimum wage in Spain
The so-called “salario mínimo interprofesional” is adjusted by the Ministry of Employment and Social Security once a year. It applies to all ages and all employments contracts. Since September 2021 the annual minimum wage is € 13.510 each year. As it is currently announced, there will be no increase in the national minimum wage in 2022. The minimum wage in Spain is compared to other European countries is lower due to market pressures.
The minimum wage in Italy
In Italy there is no set national minimum wage or as they call it “minimo salariale’’ as the amount depends on the category of the employee as well as the sectors (agriculture, service, and industry, etc) and the enrolment level. Moreover, the minimum wage is different from city to city. In 2022 the minimum annual wage in Rome for the service sector is € 13.500 and for the industrial sector is € 14.040. It is set in applicable collective bargaining agreements which set up sub-levels within the employee category of blue or white-collar employees.
The minimum wage in Germany
In Germany, the minimum annual wage (“Mindestlohn”) is € 20.424,03 since the 1st of January 2022. The minimum wage commission advised increasing the amount steadily which is why the minimum wage will be € 10,45 from the 1st of July 2022. The new government drew up plans to further increase the sum up to €12,00 per hour (€ 24.958,08 per year). The commission should then decide if it needs more adjustment. In general, the minimum wage applies to all employees over the age of 18. Excluded from that agreement are trainees, employees in voluntary or community service, participants in promotion employment measures, freelancers, and long-term unemployed.
The minimum wage in The United Kingdom
The recommendations for the increase of the minimum wage in the UK are accepted. Starting April 1st, 2022 the minimum wage in the United Kingdom is € 1774 per month. This increase was driven by an increase in goods price by 7%.
The minimum wage in Portugal
The minimum wage in Portugal in 2022 remained fixed at 822.5 per month, that is 9,870 euros per year, taking into account 12 payments per year. If we compare this to the previous year, the minimum wage increased by 6.02%.
The minimum wage in Greece
There's been a slight increase in the monthly salary in Greece starting March this year. This was the second increase in wages in 2022. Currently, the minimum wage in Greece in 2022 is € 773.50, which makes it € 9282 per year.
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