Pay, social security, working conditions - up to 30th April 2004
- Supranational salaries - What is different?
- A transparent and clear pay system
- Pension and sickness insurance
- Leave and secondment
- Hours of work: fixed or flexi-time
- Right of association: Staff Committee and unions
- Sport and culture
In times of increasing globalisation, the Commission faces stiff competition from other international businesses and organisations for the best people on the world job market. An attractive salary is a major factor in helping to secure the highly qualified staff needed to put the European ideal into practice.
Moreover, the geographical balance within the European public service can only be maintained if applicants from Member States with high wage levels can be given sufficient incentive to relocate their families, in some cases permanently, to the seats of the EU institutions in Brussels and Luxembourg.
Like other international organisations the EU institutions have a special responsibility as employers, because their staff do not have a right to the social benefits in the host country that they would have in their country of origin (e.g. child allowances). Therefore the EU institutions have a dual responsibility to their staff: they must be both an employer and a 'substitute state', i.e. they must offer specific services and facilities representing, in total, a self-contained social welfare policy - geared to standards in the EU Member States - including, for instance, the payment of child allowances, health insurance and the provision of schools and kindergarten facilities. This social policy translates into salary increments for EU staff which in the Member States are paid for not by employers but by other bodies.
- Plus and minus: allowances and deductions
- Examples of salaries of EU officials
- Comparison of international salaries
- Too high? The salary level of EU officials
Pay levels for EU officials are by and large comparable with levels in the international sector and are, moreover, below the average rates that the Member States pay to their diplomatic staff.
Nevertheless the pay of EU officials regularly comes up as a subject of
public debate, with somewhat tendentious comparisons with salaries in the
The facts are that EU officials are paid their salary in 12 monthly instalments comprising:
- a net basic salary, calculated as follows: gross basic salary
minus two different direct taxes, accident insurance
and sickness insurance/pension contributions;
- an expatriation allowance of 16% of basic salary; and
- family allowances, for staff who meet the requisite conditions.
Officials are promoted on a regular basis throughout their career. Moreover, salary increases automatically every two years until retirement. In the case of officials in one of the broader grades who are not promoted, this automatic salary increment continues for a maximum of 14 years (7 rises in step). On promotion officials gain new steps or years of seniority. Under the reforms performance-based elements will play a greater role in determining the speed of career advancement than at present.
Since 1981 the salaries of EU officials have been adjusted annually in line with changes in the purchasing power of remuneration of the Member States' public services in accordance with a legally binding formula known as the 'Method'. Under the current reforms this system, set to expire in 2003, is to be written into the Staff Regulations up to 2013.
Family allowances comprise a household allowance of 5% of basic salary, a dependent child allowance (EUR 219.38 per child) and an education allowance for school-age children up to a maximum EUR 196.05. Unmarried staff without children do not benefit from any of these allowances.
Officials also receive, once each calendar year, a sum equivalent to the cost of one (or two if the distance is more than 725 km) first-class rail fare(s) or one economy-class flight (from 500 km upwards on presentation of tickets) to their place of origin and back. Officials in categories C and D receive the equivalent of a second-class return rail ticket.
In categories C and D, staff on the lower salary scales receive additional allowances (travel, rent, canteen allowances), which are due to be abolished under the reforms.
Apart from the above, there are no other benefits (with one exception: officials moving to Brussels for the first time may buy one car and, within a consecutive twelve-month period, certain furniture and necessary personal effects free of VAT).
EU officials must pay Community tax to the institution by which they are employed, at rates comparable to income tax in the Member States. Tax rates start at 8%, with a EUR 90.36 tax-free allowance, and increase progressively to a maximum 45% on a basic salary of EUR 5 707.65 (A 6). A second tax, called the "temporary contribution", amounts to 5.83% of basic salary. These taxes together come to a total of around EUR 920 each month for the A 6 official referred to above.
Under the reform package, performance-based elements are to be integrated into the pay system and the system of allowances is to be simplified.
The gross basic salary of a newly appointed A 7 official is around EUR 4 600. It should be remembered that, on average, officials are appointed at the age of 35 and have over eight and a half years of experience working elsewhere. They do not therefore move seamlessly from university or internships into a public service job. Taking into account all allowances and deductions, a new A 7 official can count on a net monthly salary of around EUR 3 500, with an extra EUR 1 000 in family allowances for those with two school-age children.
A secretary can count on a net starting salary of EUR 2 300. A single secretary without children receives around EUR 4 300 net monthly at the top step in the final grade at the age of 50. A married counterpart with two children finishing their education would receive around EUR 1 000 more.
The gross basic salary of the 58 senior officials at the highest grade, A 1, ranges from EUR 11 940 in the first step to EUR 15 112 at the highest step. Since allowances and deductions for married officials largely cancel each other out, these gross salaries for A 1 officials approximate their final net salaries. For single officials net salaries are around 15 - 20% lower.
Proposed reform of EU pay system.
Gross basic salaries (in euro) for each category, grade and step
Married staff with two children
The EU net remuneration level is lower than the average net annual remuneration of comparable grades in the five multinational companies examined and lower than the average net annual remuneration of comparable grades in the Permanent Representations of five Member States.
Average net remuneration for staff in international organisations (UN, NATO, EIB) largely concurs with that of the EU bodies. Our level is, however, higher than the remuneration level of NATO.
The net remuneration levels of the UK, Italian and Danish Permanent Representations to the European Union are generally above the level of the EU institutions. The level of pay at the German Permanent Representation is, generally speaking, higher than the EU for non-graduate grades but lower for graduate grades. At the French Permanent Representation the remuneration level is higher or at about the same level as the EU for most of the grades.
The net annual remuneration of civil servants in the national administrations of the five surveyed Member States is lower than the remuneration of EU officials without the expatriation allowance.
The net annual remuneration of staff in multinational companies is higher than that of EU staff of all career brackets, except in the career bracket comparable to a married A4/A5 official.
As shown above, pay levels at the EU institutions are within the bounds of what the Member States pay their own civil servants working abroad in the diplomatic service and comparable to international salaries paid in similar areas.
Moreover, in contrast to practices in some EU Member States, the EU pay system is open, transparent and simply structured. It does not contain any hidden financial bonuses or other extras from other bodies equivalent to income. Moreover, unlike in the Member States family allowances are paid along with the salary. This may go some way towards explaining why the comparisons of net salaries, as between Berlin and Brussels for instance, readily put forward in the media are inaccurate. The press may, for instance, be comparing the salary of a married EU official with two children in full-time education incorporating all the attendant allowances with the net salary of his or her national counterpart, whose own allowances - such as bonuses from the employer and other extras, tax advantages like annual adjustment or house purchasing tax breaks and preferential rents, and child allowance/education allowance for school or university age children - are not counted.
The media also tend to compare the salaries of the mere 58 directors-general at the Commission with those of a much larger group of lower-level ministry officials instead of with those of junior ministers, even though this is the normal level of relations between the Commission and the Member States.
Moreover, when comparing annual salaries together with all attendant allowances and benefits, it should be recalled that these probably consist not just of 12 monthly instalments, as at the Commission, but at least 13 monthly instalments in many EU Member States, and in some cases more (generally 13 monthly salary payments plus holiday bonuses, annual tax adjustment, savings premiums, other tax benefits, child allowance, benefits in kind, school and student grants, rent allowances and tax breaks for house-building, etc.). To make a meaningful and realistic comparison, therefore, all additional allowances (even those not paid by the employer) would have to be added to those net annual salaries. When such "all-inclusive" net annual salaries at EU and national level are then divided by 12 months this produces monthly salaries for EU officials that are way below the scare figures in the media.
And if the salaries of EU officials are compared with those of national officials working in Brussels in the representations of the EU Member States, studies have shown, surprisingly, that their net international salaries are much higher on average than those of EU officials.
As stated at the beginning of this section, the Commission as an international employer can only continue to recruit highly qualified staff if it offers competitive salary levels. The Commission administration would otherwise not attain the high quality work that is essential if it is to do justice to its responsibility for 370 million citizens (soon to be nearly 500 million).
The Commission provides comprehensive social security for its staff, including sickness insurance, accident insurance, invalidity pension and a survivors' pension.
All staff must contribute to these measures (see contributions in the above example of salary calculation).
EU officials normally reach pensionable age at 60, but have the option of retiring between the age of 50 and 65. After 35 years of pensionable service, officials are entitled to the maximum pension of 70% of their last basic salary.
For every year of service up to the age of 60, officials are entitled to a pension of 2% of their salary. Thus 35 years of service are required to reach the maximum entitlement of 70%. However, there is a bonus of 5% of the acquired rights at the age of 60 for every year that officials work beyond the age of 60. Thus pension entitlement increases until the maximum of 70% of the last basic salary has been reached. This system may be one of the reasons why Community officials tend to retire later than civil servants in the Member States.
The pensions of EU officials, like their salaries, are paid out of the EU budget. Officials currently pay a compulsory contribution of 9.25% of their gross salary towards their pensions. This is one third of the actuarial amount required to cover pension payments.
The widow(er) of an official is entitled to 60% of the official's last pension payment. The orphans' pension for children of an official who dies leaving no spouse is 80% of the amount to which a widow(er) would have been entitled for the first child and to twice the dependent child allowance for each additional child.
To acquire pension rights officials currently pay a compulsory contribution of 9.25% of their gross basic salary. This is one third of the actuarial amount required to cover pension payments. This is a kind of virtual accounting, as these contributions are not set aside or invested in any way for future pay-out as pensions. In point of fact salaries are simply reduced each month by 9.25%, which shrinks the expenditure of the EU institutions. At the same time pension payments, just like salaries, are paid out of the current EU budget.
In the case of total permanent invalidity an official is entitled to a pension. Where the invalidity is occupational in origin, the pension is 70% of basic salary. Where the invalidity is due to some other cause, the invalidity pension is equal to a notional pension (the amount to which the official would have been entitled at the age of 65 years). Any possible abuse of this rule is to be countered through the latest reforms by ensuring that this kind of pension is not more attractive for survivors than a normal pension.
To finance invalidity, officials are insured against accidents at work and occupational illness. For this they pay a contribution of up to 0.1% of basic salary.
In the case of illness, up to 80% of the expenditure incurred by officials and their families are reimbursed. For certain basic services this rate is increased to 85% (consultations and visits, hospitalisation, pharmaceutical products, radiology, and laboratory tests). For serious long-term illnesses, such as cancer, it rises to 100%.
As a rule officials have to pay at least 15% of medical expenses themselves. One third of the remaining expenditure, up to a maximum 2% of gross basic salary, can be paid by the official in the form of a monthly deduction from gross salary.
Officials must undergo a preventive medical check-up every year.
All EU officials are entitled to annual leave of 24 working days. On top of this entitlement travelling time is granted based on the distance between the place of origin and the place of employment (from 1 day for distances between 50 - 250 km up to 6 days for distances over 2 000 km).
In addition to annual leave there are rules for special leave for marriage, moving house, death of relatives or serious illnesses, births, etc.
Pregnant women are entitled to leave starting six weeks before the expected delivery date and ending 10 weeks after the delivery date. Under the reform package such maternity leave is to be increased from 16 to 20 weeks.
In the event of sickness or accident, officials are entitled to sick leave. A medical certificate must be produced if officials are absent for more than three days. If, over a period of 12 months, officials who, while complying with this condition, are absent for a total of more than 12 days must produce a medical certificate for any further absence because of sickness. This rule is to be formulated more clearly under the reform package.
In exceptional circumstances officials may apply for leave on personal grounds for a maximum of one year, which may be extended two times for a further one year each time. When bringing up a child under five years old this leave may be extended by one year up to four times. In the case of married couples, where both spouses are officials, this leave may be extended annually five times, if the place of employment of one of the two is at a great distance from the conjugal home.
Officials may be asked in the interests of the service to serve temporarily in a post outside the Commission. This generally involves serving temporarily in a national administration, or more rarely research assignments. The reform package ensures that Commission officials on secondment do not serve in administrations in their country of origin but in other Member States.
An official on secondment is entitled to compensation of any difference in salary and to reinstatement in his or her former post at the end of the secondment.
The working week is 37.5 hours. In Brussels all Commission departments are obliged to ensure minimum staffing of their offices on each working day between 08.30 and 13.00 and between 14.15 and 17.30.
The core hours when all staff must be present are:
Monday to Thursday: 09.30 - 12.00 and 14.45 - 17.00
Friday: 09.30 - 12.00 and 14.45 - 16.00
Taking into account these core times flexi-time rules apply between 08.00 and 20.00. Officials in categories C and D are moreover entitled to compensatory leave for overtime.
Part-time working is also possible.
Generally speaking, officials in active employment must be at the disposal of their institution at all times. Officials may, moreover, be required to remain on standby duty at their place of work or at home outside normal working hours depending on the requirements of the service.
In both Brussels and Luxembourg there is an extensive sporting and cultural programme, mostly organised by officials themselves. The Commission however pays the running costs of sports facilities.