The Court of Justice of the European Union (CJEU) has backed most of the bloc’s law on minimum wages, but clipped Brussels’ wings on how far it can go.
Judges at the EU’s top court in Luxembourg ruled that the 2022 Directive on “adequate minimum wages” is legally sound. But they struck down two small parts that set detailed rules for national governments. Those “overreached national competences”, the court said.
The decision is good news for the European Commission, which pushed the law through to boost pay for Europe’s lowest earners. But it also shows there are limits to what the EU can decide when it comes to wages.
Economists say the CJEU judgment will not change much in practice. “It remains very loose — countries just have to check if their minimum wage allows a decent living,” Peter Vanden Houte, chief economist at the bank ING Belgium, told Brussels Signal today.
“The directive loses some strength now that the EU can’t impose criteria. But the court is right: Setting wages is a national matter.”
He added that the annulled rule on wage indexation, which could have stopped minimum wages from falling in rare cases of deflation, “almost never happens anyway”.
Europe’s biggest trade union group said the ruling must not be an excuse for inaction. “The Directive is solid, but it needs solid implementation,” said Esther Lynch, general secretary of the European Trade Union Confederation (ETUC).
“Workers need real pay rises and real bargaining power, not legal loopholes.”
The ETUC warned that dropping the rule on indexation could allow some governments to freeze pay, even though the EU’s Social Charter requires fair wages and collective bargaining.
Socialists and Democrats Group leader in the European Parliament, Iratxe García MEP, called the court’s decision “a victory for workers”, saying it helps to reduce inequality and lift salaries.
Greens/EFA Group co-president Terry Reintke MEP said it confirms the Directive’s “positive impact”, pointing to rising minimum wages across Europe since its adoption.
But Germany’s Left MEP Özlem Demirel said the ruling “fails to close the path to poverty wages”.
Denmark brought the case in 2022, arguing that the EU had no right to interfere in how wages are set.
Copenhagen said the Directive blurred the line between EU and national powers by imposing wage-setting criteria.
The Court agreed only in part. It annulled the list of mandatory criteria and a rule that banned minimum wages from falling after automatic adjustments.
But it rejected Denmark’s broader appeal — confirming that the EU can ask countries to check whether their minimum wage ensures a decent living and to promote collective bargaining.
The EC hailed the judgment as a win for “dignity, fairness and financial security”.
“Every worker in Europe should be able to earn a living,” said EC President Ursula von der Leyen.
The EC’s Executive Vice-President for Social Rights and Skills, Quality Jobs and Preparedness, Roxana Mînzatu, called it “good news for workers and for employers who pay fair salaries”.
