Minimum wage under threat: how Luxembourg can circumvent European rules

Luxembourg's Labour Minister Georges Mischo has found himself at the centre of a political and social conflict over how the country should implement the EU's 2022 Fair Minimum Wage Directive. The directive was authored by a Luxembourger, former European Commissioner Nicolas Schmit, who now makes no secret of his bewilderment: why is his country resisting its own standards?

The EU proposes two benchmarks: 60 per cent of the median salary or 50 per cent of the average salary. In terms of Luxembourg reality, this means:

• €2,900 (median)
• €3,100 (average)

The current minimum for unskilled workers is €2,700 net per month, one of the highest in Europe. But in a country with expensive housing and rising costs, even this amount is on the verge of social vulnerability, especially for retail and service workers.

Michaud's proposal is to exclude civil servants' salaries, overtime and the 13th salary from the calculation, allegedly because of "distorting the picture". This would allow Luxembourg to claim that the country is already in compliance with the directive and avoid full implementation.

Opponents see this as an attempt to circumvent the essence of the directive, which is not about formal compliance but about real protection for workers. Nicolas Schmit likened this tactic to "changing the thermometer because you don't like the temperature".

The OGBL and LCGB fear that the exemptions from the calculation will also be transferred to national indexations, which will reduce the growth rate of minimum wages in the future. LCGB spokesman Christophe Knebeler believes that if manipulation of the calculations is allowed now, all future adjustments will be affected next time.

The head of the CGFP union, Romain Wolff, argues that there is no legal basis for excluding civil servants' salaries from the calculation base. He warns that trying to pit the public sector against the private sector is dangerous for social peace in the country. All the more so because the national estimates have so far included civil servants' salaries.

Meanwhile, Nicolas Schmit's directive itself is being considered by the European Court of Justice: according to the Advocate General's preliminary opinion, the document may not comply with EU legislation. However, Schmit considers this conclusion "weak" and assures that he consulted a number of lawyers who refuted such conclusions.

A final court ruling is expected in autumn 2025. If the directive stands, the Luxembourg government will be under pressure - not only from Brussels, but also domestically.