Labour Minister Mischo faces backlash for proposed calculation method

Minister of Labour Georges Mischo faces criticism over his proposed method for implementing the EU's minimum wage directive.

If applied as originally drafted, the directive would likely require Luxembourg to increase its minimum wage. However, Mischo's approach – excluding civil servant salaries, overtime pay, and the 13th month from calculations – could allow the country to argue it already complies. The suggestion has drawn swift opposition.

The directive, authored by former Luxembourg EU Commissioner Nicolas Schmit in 2022, was due to be transposed into national law seven months ago. Schmit, now perplexed by Luxembourg's delays, told our colleagues from RTL Télé that the rules were primarily designed for low-wage nations, making his home country's resistance "bewildering".

Luxembourg's current non-qualified minimum wage (€2,700/month, exempt from tax) ranks among Europe's highest. Yet the margin is narrow: a slight reduction would place many recipients – such as retail and restaurant workers – at risk of poverty in one of the EU's wealthiest nations.

The European Commission's benchmarks (60% of median income or 50% of average income) would push the minimum wage to €2,900 or €3,100 gross, respectively – a significant rise. Critics argue Mischo's exclusions sidestep the directive's intent to ensure fair wages.

The Luxembourg government has challenged the EU directive's wage benchmarks, with Minister Mischo arguing that including civil servants' salaries – with their additional bonuses – would "substantially distort" the results. Under his proposal, these earnings would be excluded from calculations submitted to the General Inspectorate of Social Security (IGSS). Mischo emphasised that no final decision has been made and dismissed accusations of attempting to use "sleight-of-hand" undermine workers' interests.

Schmit strongly opposes this approach. The former EU Commissioner likened it to "measuring a fever with a thermometer, then switching thermometers because you dislike the reading". He argued that excluding certain income streams violates the directive's goal of uniform international criteria.

Trade unions have escalated their criticism. The Independent Luxembourg Trade Union Confederation (OGBL) and Luxembourg Confederation of Christian Trade Unions (LCGB) suspect the government may extend these exclusions to Luxembourg's biennial minimum wage adjustments – potentially weakening future raises. LCGB representative Christophe Knebeler warned that if the government excludes key elements for the EU calculation, they could do the same for national adjustments. According to the unions, this risks further eroding social cohesion. Currently, factors like civil servant pay are included in Luxembourg's domestic reviews.

Civil servants are also resisting any exclusion of their salaries from the minimum wage calculation, according to Romain Wolff, President of the General Confederation of the Civil Service (CGFP). Wolff emphasised that, as far as he is aware, no legal provision authorises such an exemption and cautioned against "once again pitting the civil service against the private sector". The CGFP insists that state and municipal workers' salaries must be factored into the benchmark.

Meanwhile, the legality of Schmit's EU directive is under review by the European Court of Justice. While an advocate general has preliminarily deemed it non-compliant with EU law, Schmit remains confident, citing consultations with "numerous legal experts" who dismissed the opinion as "very weak". He warned that opponents expecting the directive's annulment may be "a bit too optimistic".

A final ruling is expected this autumn.

Full report by RTL Télé (in Luxembourgish)