Definition (ESRS)
Definition (ESRS)
Pay: The usual basic or minimum wages and salaries and all other remuneration paid by the employer to the Employee directly or indirectly in cash or in kind on the basis of the employment relationship ("supplementary or variable components"). "Income" means the gross annual remuneration and the corresponding gross hourly wage. "Median income" means the income level from which the number of Employees with lower incomes is equal to the number of Employees with higher incomes.
Adequate wage: A wage that is sufficient to meet the needs of the worker and his or her family, taking into account national economic and social conditions.
Worth knowing
Worth knowing
Minimum wage ≠ Adequate wage
Adequate wages in the EEA area
Directive (EU) 2022/2041 of the European Parliament and of the Council on adequate minimum wages in the European Union, which had to be transposed into national law by November 15, 2024 at the latest, serves to determine adequate wages or minimum wages in the EEA area. The directive is based on international reference values for the assessment of appropriate minimum wages:
60% of the gross median wage and 50% of the gross average wage (this data can be taken from the European Labor Force Survey)
indicative reference values at national level
Example: If the gross median wage in country X is € 1,500 and an employee of the company earns less than € 1,500 gross, the salary does not correspond to an appropriate minimum wage.
Excursus Minimum Wage Directive: Directive (EU) 2022/2041 does not aim to introduce a uniform statutory minimum wage throughout Europe, but rather promotes the strengthening of social partnership structures for wage setting. Member states with a collective bargaining rate of less than 80% are obliged to develop action plans to increase collective bargaining coverage. In Austria, where collective agreement coverage exceeds this threshold, there is no obligation to draw up such action plans.
Adequate wages outside the EEA area
Adequate wages outside the EEA area are determined in the following order:
Primary basis: priority is given to the level of pay defined by existing international, national or sub-national laws, official standards or collective agreements that is necessary for an adequate standard of living.
Alternative basis: In the absence of such regulations, the company uses national or subnational minimum wages defined by law or collective agreement.
Supplementary support: In cases where neither laws nor minimum wages are available, recognized platforms and tools can be used for support. One example of this is the IDH Benchmark Finder, a tool from the Roadmap on Living Wages project. This offers both free and paid resources to help companies determine Adequate wages.
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