How to enforce minimum wages?

In some countries more than half of all wage earners who are entitled to the minimum wage are paid wages below the legal floor.

High rates of non-compliance have negative consequences not only for workers and their families, whose rights are violated, but also for compliant employers, as it gives non-compliant enterprises an illegitimate cost advantage.

Compliance can be increased through a number of implementation measures, including:

• information and awareness raising campaigns
• capacity building activities for employers’ and workers’ representatives
• empowering workers to claim their rights through individual complaints as well as collective action
• measures to formalize the informal economy
• targeted labour inspections
• sanctions that function as a deterrent to non-compliance
• monitoring and responsible purchasing practices within global supply chains
• public employment programmes that pay minimum wages

The extent of non-compliance can also vary depending on the design of minimum wage policies and the number of rates, and also depends on the effectiveness of the entire process of designing and implementing minimum wage policies, from fixing the right level and rate structure in the first place, in full consultation with employers’ and workers’ organizations.

This is why a comprehensive approach is necessary.