Chapter 6: How to enforce minimum wages

6.4 The role of employers’ and workers’ organizations

Why consultation and involvement of social partners is necessary to raise compliance

Compliance with minimum wages depends on the effectiveness of the entire process of designing, implementing and enforcing minimum wage policies. This process starts from determining the right level and rate structure, in consultation with employers’ and workers’ organizations, and extends to considering measures to facilitate and encourage compliance when needed.

As highlighted in Chapter 3, the principle of full consultation and participation, on a basis of equality, of the social partners in the establishment and operation of minimum wage systems is one of the pillars of Convention No.131 and Recommendation No.135 1.

A participative process of minimum wage fixing - which allows the minimum wage to be set at a level agreed to by workers and employers’ representatives - tends to give the minimum rate more legitimacy with social partners thereby also facilitating compliance.

Furthermore, a tripartite decision-making process could facilitate the common interpretation of minimum wage law, thus avoiding misunderstandings and confusion among workers and employers2.

As well as involvement in designing rates, workers’ and employers’ organizations can disseminate information on minimum wages to their members and provide related advice and support. Training activities for employers’ and workers’ representatives can help to ensure that non-compliance is not due to lack of awareness or misunderstanding.

Empowering workers to claim their rights through individual complaints as well as collective action is also key

In some countries aspects of this role are laid down in law. In the Philippines, legislation provides that union representatives or workers representing workers’ interests should always accompany labour inspectors during inspections.

In Norway, contracting enterprises and their trade union representatives have a particular role in the enforcement of extended agreements. A contracting enterprise must ensure that its sub-contractors also abide by the agreements. Sub-contractors’ employees can hold the contractors liable for missing wage payments in areas that fall under the extended collective agreement.

Norway and Iceland also have rules ensuring that trade unions have the right to inspect the wages and labour conditions of workers. In Norway, this applies to the employees of sub-contractors in areas covered by the extended agreements, whereas in Iceland this applies in general. Furthermore, in Norway, contractors are joint and severally liable for sub-contractors’ wage obligations.3

In Finland, the legislation establishes that employers’ associations and employers bound by a collective agreement shall respect its provisions and that employers’ organizations shall monitor the agreement’s application by its members.

In countries such as India or Israel, workers’ organizations can bring claims for unpaid wages to court on behalf of the worker concerned.

1 ILO General Survey on Minimum Wage Systems (2014), p.101.
2 Benassi, C. 2011, “The Implementation of Minimum Wage: Challenges and Creative Solutions”, Working Paper No.12, ILO GLU, March.
3 Eldring, L. and K. Alsos, (2012). European Minimum Wage: A Nordic Outlook Fafo Report, Norway, p.73