Minimum wage non-compliance

ABSTRACT

We use a unique question from the Irish Labour Force Survey that captures the reasons for workers being paid below the minimum wage. Compared to existing work, this allows us to more precisely identify sub-minimum wage workers. We find that 5.6 percent of minimum wage workers are paid below the minimum wage for reasons other than those permitted under legislation. This is considerably lower than estimates reported in the existing literature.

KEYWORDS:

• Minimum wage
• non-compliance
• sub-minimum workers
• labour

JEL CLASSIFICATION:

• J30
• J80

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ It is possible that some individuals who are working with family members classify themselves as ‘employees’, instead of ‘assisting relatives’.