BRUSSELS (Reuters), – Tuesday’s breakthrough in the European Union was a common set of rules regarding minimum wages for all 27 members. The provisional agreement outlines measures to encourage collective bargaining and enforce minimum wages more effectively.

European Parliament, European Council and other member states of the bloc agreed to the provisional agreement overnight. Both institutions still need formal approval.

The European Commission set the scene for negotiations in October 2020 with a proposal which outlined common standards for minimum wages, but did not create a minimum wage.

Ursula von der Leyen (head of EU executive Commission) welcomed agreement to the draft law. This is intended to decrease wage inequalities and work poverty.

“The EU delivered on its promises. In a statement, she stated that the new minimum wage rules will “protect dignity and ensure work is paid.”

The European Parliament stated that the agreement requires EU member countries to determine if their existing minimum wages provide enough to maintain a decent standard living.

Countries in which less than 80 percent of employees are covered under collective bargaining must create an action program with a defined time-line and concrete actions to increase this wage setting.

The European Parliament stated that the agreement also imposes an obligation on EU countries to create an enforcement system. This includes reliable monitoring and controls as well as field inspections, to deal with abusive subcontracting, fraudulent self-employment, overtime and other forms of abuse.

It is still necessary to approve the agreement by both formal votes in the Council as well as the European Parliament. EU countries have then two years to put the EU rules into their own national legislation.

Six of the 27 EU countries have wage agreements between trade unions or employers. 21 other EU nations have minimum wage statutory laws.