Minimum wage law

From Wikipedia, the free encyclopedia

Minimum wage law is the body of law which prohibits employers from hiring employees or workers for less that a given hourly, daily or monthly minimum wage. More than 90% of all countries have some kind of minimum wage legislation.[1]

The first moves to legislate wages did not set minimum wages, rather the laws created arbitration boards and councils to resolve labour conflicts before the recourse to strikes.[citation needed]

  • In 1896, New Zealand established such arbitration boards with the Industrial Conciliation and Arbitration Act
  • In 1899, the state of Victoria, Australia established similar boards
  • In 1907, the Harvester decision was handed down in Australia. It established a 'living wage' for a man, his wife and two children to "live in frugal comfort"
  • In 1909, the Trade Boards Act was enacted in the United Kingdom, establishing four such boards
  • In 1912, the state of Massachusetts, United States, set minimum wages for women and children
  • In the United States, statutory minimum wages were first introduced nationally in 1938[2]
  • In the 1960s, minimum wage laws were introduced into Latin America as part of the Alliance for Progress; however these minimum wages were, and are, low[3]

Contents

[edit] Minimum wage law by country

See also: List of minimum wages by country

[edit] Australia

  • In 1896 in Victoria, Australia, an amendment to the Factories Act provided for the creation of a wages board.[4] The wages board did not set a universal minimum wage; rather it set basic wages for 6 industries that were considered to pay low wages.[5]. First enacted as a four year experiment, the wages board was renewed in 1900 and made permanent in 1904; by that time it covered 150 different industries.[5] By 1902, other Australian states, such as New South Wales and Western Australia, had also formed wages boards.[4]
  • The notion of a "basic wage" was established in 1907 with the Harvester Judgment.
  • The current federal minimum wage for full or part-time employees aged over 21 in Australia is AU$13.74 (~US$12.29) per hour.[6]
  • In 2005, the Federal Government implemented significant changes to the nation's labour system. These changes do not explicitly lower the minimum wage (in nominal terms) but may slow its rate of increase[citation needed]. (See also, Australian Industrial Relations Law Reform 2005.)

[edit] Brazil

The Brazilian national minimum wage is adjusted annually. As of March 2008, the minimum wage is R$ 415 (~US$239) per month.[1] [2]

Brazilian states can set higher minimum wages, which may vary in different economic sectors.

In Brazil each increase the minimum wage results in a significant burden on the federal budget, because the minimum wage is tied to social security benefits and other government programs and salaries.[3]

[edit] Canada

Main article: List of minimum wages in Canada

Under the Canadian Constitution's federal-provincial division of powers, the responsibility for enacting and enforcing labour laws rests with the ten provinces; the three territories also were granted this power by virtue of federal legislation. This means that each province and territory has its own minimum wage. The lowest general minimum wage in force as of April 2008 is that of province, Prince Edward Island (C$7.50 an hour), the highest is that of Ontario (C$8.75 an hour). Some provinces allow lower wages to be paid to liquor servers and other tip earners, and/or to inexperienced employees. British Columbia allows employers to pay as little as C$6 an hour to an inexperienced worker, but increases to $8 an hour after a worker has gained 500 hours of experience.

The federal government could theoretically set its own minimum wage rates for workers in federal jurisdiction industries (railways, for example). As of 2006 however, the federal minimum wage is defined to be the general adult minimum wage rate of the province or territory where the work is performed. This means, for example, that a railway company could not legally pay a worker in British Columbia less than C$8 an hour regardless of the worker's experience.

[edit] People's Republic of China

The Ministry of Labor and Social Security set China's first minimum wage law on 1 March 2004. The Regulations on Enterprises Minimum Wage was made to "ensure the basic needs of the worker and his family, to help improve workers' performance and to promote fair competition between enterprises." One monthly minimum wage was set for full-time workers, and one hourly minimum wage for part-time workers. Provinces, municipalities, and autonomous regions are allowed to legislate for their own minimum wage separate from the national one.[7]

Guangdong Province increased its minimum wage on 1 September 2006 and was split into five categories. The highest is ¥25.80 per month or ¥4.66 (~US$0.60) an hour (in Guangzhou city). The lowest is ¥20.70 per month or ¥0.69 (~US$0.25) an hour.[8]

[edit] European Union

In the European Union 18 out of 27 member states currently have national minimum wages.[9] Many countries, such as Norway, Sweden, Finland, Denmark, Switzerland, Germany, Austria, Italy, and Cyprus have no minimum wage laws, but rely on employer groups and trade unions to set minimum earnings through collective bargaining.[10]

[edit] France

As of July 2006, the minimum wage in France is set at €8.27 (~US$11.98) per hour. In 2004, 15% of the working population received the minimum wage. The minimum wage in France is updated every year in July by the government. By law, the increase cannot be lower than the inflation for the current year. In the recent years the increase was up to two times higher than the inflation (around 5% raise with an inflation around 2%).

[edit] Ireland

Ireland's minimum wage was introduced in 2000, and is currently €8.65 an hour. This is subject to reduction as follows:

  • 30% reduction for all employees under 18.
  • 20% reduction for employees over 18 in their first year of employment in any job since they turned 18.
  • 10% reduction for employees over 18 in their second year of employment in any job since they turned 18.

It may further be reduced by up to €7.73 a day if lodgings and/or food are provided as part of a job.[11]

Trainees (including those over 18) are also entitled to different minimum wages, reduced as follows:

  • 25% reduction for the time during the first one-third of the course.
  • 20% reduction for the time during the second one-third of the course.
  • 10% reduction for the time during the final one-third of the course.

Due to general difficulties in finding employees, most jobs pay above the minimum wage, with only 3.1% of employees receiving it in 2004.[12]

Ireland has the second highest minimum wage in the EU, after Luxembourg. [13]

[edit] Japan

In Japan minimum wage depends on the industry and the region. The lowest minimum wage for a region (Miyazaki) is ¥4,712 (~US$47.34) per day, and the highest minimum wage for a region (Tokyo, Kanagawa, Osaka) is ¥5465 (~US$54.91) per day. The minimum wages are set by the Minister of Labour or the Chief of the Prefectural Labour Standards Office. Recommendations are made by the Minimum Wage Council.[14]

[edit] New Zealand

New Zealand was the first country to implement a national minimum wage, enacted by its government through the Industrial Conciliation and Arbitration Act 1894.[4] In April 2007 the adult (18+) minimum wage was raised to NZ$11.25 an hour, and the minimum wage for 16 and 17 year olds raised to NZ$9 per hour. There is no minimum wage for workers under 16 years of age.[15]

[edit] Pakistan

Pakistan's first minimum wage was implemented in 1992 at 1,500PKR (~US$24.60) per month. In 1996 it was raised to 1,650PKR (~US$27.10) per month. As of 1998 the minimum wage was 1,950PKR (~US$32) per month. This wage does not apply to agricultural workersand Newspapers however.[16] Than minimum wage in Pakistan (as by the government announcement in 2006) is PKR 4000 per month (Equivalent to $66 per month) Currently minimum wage in pakistan as announced by the government of pakistan in 2008 is PKR 6000.

[edit] Romania

Two minimum wage levels are enforced in Romania. For state employees, the level is set by law at 390RON (~US$165). For all other employees, the wage is set at 440RON (~US$185) by collective bargaining, which also stipulates multiplication indices for various levels of education. Jobs that require high-school and college qualifications are paid at least 1.5 and 2 times the minimum wage, respectively.[17] Teachers' unions resorted to justice to claim same treatment and be paid according to collective bargaining. As of November 2007, they won three landmark cases and expect similar decisions in several dozens other courts.[18] A single, unified level is proposed starting 1 January 2008, at 500RON (~US$210), while the existence of indices came into debate.[19]

[edit] Republic of China (Taiwan)

The Republic of China government does not have a set minimum wage, but a basic wage in its Labor Standards Law serves the minimum wage function. The basic wage set per month is NT$15840, and has not been readjusted since 1997. The calculated basic hourly wage is NT$66 (US$2).[4]

Government announced minimal wage growth to UAH 400 ($ 80) at 1 April 2007.

[edit] United Kingdom

 This article or section needs to be updated.
Please update the article to reflect recent events / newly available information, and remove this template when finished.

Municipal regulation of wage levels began in some towns in 1524. The Trade Boards Act of 1909 created four Trades Boards that set minimum wages which varied between industries for a number of sectors where "sweating" was generally regarded as a problem and where collective bargaining was not well established. This system was extended considerably after the Second World War; in 1945 Trades Boards became Wage Councils, which set minimum wage standards in many sectors of the economy, including the service sector as well as manufacturing. Wage Councils were finally abolished in 1993, having fallen into decline due, in large part, to Trades Union opposition. A lower limit of pay, or "pay floor" was regarded as threatening the voluntary system of collective bargaining favoured in the UK. The government had first made a serious attempt to abolish Wage Councils in 1986, having abandoned existing legislation that tried to widen the scope of voluntary agreements to include those firms that had not taken part in negotiations, such as the Fair Wages Resolutions. These required that government contractors pay fair wages and respect the rights of their employees to be members of trades unions.

A National Minimum Wage (NMW) was introduced for the first time by the Labour government on 1 April 1999 at the rate of £3.60 per hour for those workers aged 22 and over.[20] This rate was set after the Low Pay Commission (LPC), an independent body the government appointed in July 1997 to advise it on low pay, recommended the rate.[21] The LPC's permanent status was later confirmed and it continues to make recommendations to government on the NMW, which has been uprated in October every year since 2000. The LPC board consists of nine members—three trade unionists, three employers, and three labour market relations experts. The Commission undertakes consultations each year to gather available evidence before making recommendations in its biennial review—the next such set of recommendations being due in the spring of 2007.

The current minimum wage in the UK (set October 2007) for adults aged 22 or older is £5.52 per hour. For workers between the ages of 18 and 21 the minimum wage is £4.60 per hour. The minimum hourly wage for all workers under the age of 18 (who are, in addition, no longer of compulsory school age) is £3.40. There is no minimum wage for those still of compulsory school age.

The minimum wage is set to rise again in October 2008 to £5.73 per hour for workers aged 22 and over, £4.77 for workers aged 18 to 21 and £3.53 for workers under the age of 18.

Some workers undertaking apprenticeships or accredited training may be exempted (that is, not considered eligible to receive the NMW) for a certain period of time, which varies according to their age and the length of time in employment. Other categories of worker who are exempt include au pairs, share fishermen, clergy, those in the Armed Forces, prisoners and some people working in family businesses. The rate payable under the NMW can, in all cases, also be reduced where accommodation is provided to the worker.

Unlike most other employment rights legislation in the UK, which generally rely on affected individuals raising grievances and making claims, if necessary, before tribunals to enforce these rights, the NMW has compliance teams, attached to Her Majesty's Revenue and Customs (HMRC) offices who will act on approaches from workers who think they are being paid less than the minimum wage by contacting and visiting their employers. Affected workers can either make a complaint directly to a national helpline (0845 6000678) or seek advice from another agencies such as their local Citizens Advice Bureau or the Scottish Low Pay Unit—this is particularly recommended if other employment rights issues are involved, as the HMRC can only deal with minimum wage enquiries.

See also: National Minimum Wage Act 1998

[edit] United States

Further information: List of U.S.A. minimum wages and Minimum wage in the United States
History of the federal minimum wage in real and nominal dollars in the United States.
History of the federal minimum wage in real and nominal dollars in the United States.

In the United States, statutory minimum wages were first introduced nationally in 1938.[22]

The Fair Minimum Wage Act of 2007 is the current federal minimum wage law of the United States. It was signed into law on May 25, 2007 as a rider to the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007. The act raises the federal minimum wage from $5.15 an hour to $7.25 an hour by 2010. The bill also contains almost $5 billion in tax cuts for small businesses.

Nearly all states within the United States have minimum wage laws; South Carolina, Tennessee, Alabama, Mississippi and Louisiana are the only states yet to set a minimum wage law.[23]


[edit] See also

[edit] References

  1. ^ ILO 2006: Minimum wages policy (PDF)
  2. ^ Sanjiv Sachdev (2003). "Raising the rate: An evaluation of the uprating mechanism for the minimum wage". . Employee Relations Retrieved on 2007-02-12.
  3. ^ Bethell, Leslie (June 29, 1990). The Cambridge History of Latin America. Cambridge University Press. ISBN 0-521-24518-4.  p. 342.
  4. ^ a b c American Academy of Political and Social Science. "The Cost of Living." Philadelphia, 1913.
  5. ^ a b Waltman, Jerold. "The Politics of the Minimum Wage." University of Illinois Press. 2000
  6. ^ Wage-Setting Decisions July 2007 (PDF). Australian Fair Pay Commission. Retrieved on 2008-02-09.
  7. ^ China sets minimum wage rules (HTML). Embassy of the People's republic of China in the United States of America (2004-02-06). Retrieved on 2006-12-19.
  8. ^ Social GovernanceS (August 2006). Guangdong to Raise Minimum Wages in September 2006 (PDF). SGS Hong Kong Limited. Retrieved on 2006-12-19.
  9. ^ Eurostat (2006): Minimum Wages 2006 - Variations from 82 to 1503 euro gross per month(PDF)
  10. ^ Ehrenberg, Ronald G. Labor Markets and Integrating National Economies, Brookings Institution Press (1994), p. 41
  11. ^ Minimum Rates of Pay in Ireland—Irish government information Web site, retrieved on 2006-11-30.
  12. ^ Minimum Pay in EU25: Spain and UK have lowest percentage of workforce on minimum wage—FinFacts.com article, published 13 July 2006, retrieved on 2006-11-30.
  13. ^ RTÉ News - Minimum wage rises by 35c per hour
  14. ^ Realization of Meaningful, Secure Employment for Workers (HTML). Ministry of Health, Labour and Welfare of Japan. Retrieved on 2006-12-19.
  15. ^ Minimum Pay : Employment Relations Service
  16. ^ Bureau of International Labor Affairs (1998). Pakistan Minimum Wage (HTML). U.S. Department of Labor. Retrieved on 2006-12-19.
  17. ^ Cele doua salarii minime in vigoare bulverseaza autoritatile si angajatorii (HTML). Ziarul Financiar (2007-01-17). Retrieved on 2007-11-18.
  18. ^ Salariile intelectualilor ar putea fi sacrificate pentru ale muncitorilor (HTML). Cotidianul (2007-11-7). Retrieved on 2007-11-18.
  19. ^ Salariul minim: 500 de lei pentru muncitori. Diploma se mai negociaza (HTML). Cotidianul (2007-11-14). Retrieved on 2007-11-18.
  20. ^ History of the National Minimum Wage. Employment Matters. United Kingdom Department of Trade and Industry (17 June 2006). Retrieved on 2006-06-22.
  21. ^ What We Do Low Pay Commission
  22. ^ Sanjiv Sachdev (2003). "Raising the rate: An evaluation of the uprating mechanism for the minimum wage". . Employee Relations Retrieved on 2007-02-12.
  23. ^ DOL WHD: Minimum Wage Laws in the States