103 III (1B) Minimum wage systems ILO Minimum wage systems INTERNATIONAL LABOUR CONFERENCE 103rd SESSION, 2014 ILC.103/III/1B International Labour Conference, 103rd Session, 2014 General Survey of the reports on the Minimum Wage Fixing Convention, 1970 (No. 131), and the Minimum Wage Fixing Recommendation, 1970 (No. 135) Third item on the agenda: Information and reports on the application of Conventions and Recommendations Report of the Committee of Experts on the Application of Conventions and Recommendations (articles 19, 22 and 35 of the Constitution) Report III (Part 1B) International Labour Office Geneva Minimum wage systems INTERNATIONAL LABOUR OFFICE GENEVA ISBN 978-92-2-127744-6 (print) ISBN 978-92-2-127745-3 (Web pdf) ISSN 0074-6681 First edition 2014 © Front cover illustration: protection-of-money: Sergey Ilin The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. 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Formatted by TTE: Confrep-ILC103(2014)-III(1B)[NORME-140128-1]-En.docx Printed by the International Labour Office, Geneva, Switzerland Summary Introduction Chapter I. Definitions and objectives of the minimum wage standards Chapter II. The scope of minimum wage systems Chapter III. Minimum wage fixing machinery Chapter IV. Variations in coverage of minimum wages Chapter V. Consultation and participation of the social partners and other actors Chapter VI. Criteria for fixing minimum wages and adjustment procedures Chapter VII. Minimum wage enforcement measures Chapter VIII. Minimum wages, economic crisis and austerity measures Chapter IX. Final observations Appendices ILC.103/III/1B v Contents Page Summary .......................................................................................................................... v Introduction .................................................................................................................... 1 Section 1. Context and scope of the General Survey .............................................. 1 Section 2. Historical background of ILO standard-setting on minimum wage fixing .............................................................................................. 2 Section 3. Other relevant ILO standards .................................................................. 7 Section 4. Recent developments .............................................................................. 9 Section 5. References to minimum wages in other international instruments ........... 12 Section 6. Outcome of the Working Party on Policy regarding the Revision of Standards ............................................................................................ 16 Section 7. Ratification status .................................................................................... 17 Section 8. Available information ............................................................................... 17 Section 9. Outline of the General Survey ................................................................. 17 Chapter I Definitions and objectives of the minimum wage standards ............................... 19 Section 1. Definitions ............................................................................................... 19 1. The concept of the minimum wage .......................................................... 19 2. The components of the minimum wage ................................................... 20 3. Minimum wage, living wage and fair wage............................................... 27 4. System and methods for determining minimum wages ............................ 30 Section 2. Objectives of Convention No. 131 and Recommendation No. 135 .......... 30 Conclusion ................................................................................................................ 33 ILC.103/III/1B vii Minimum wage systems Chapter II The scope of minimum wage systems ................................................................... 35 Section 1. Scope of application of Convention No. 131 ............................................ 35 Section 2. Groups of wage earners not covered by national minimum wage systems ......................................................................................... 37 1. Exclusions mentioned in first reports on the application of the Convention .............................................................................................. 37 2. Exclusions currently in force .................................................................... 39 Agricultural workers ............................................................................ 39 The public sector ................................................................................ 39 Young workers and apprentices .......................................................... 40 Workers employed in family businesses ............................................. 41 Wage earners in small enterprises ...................................................... 42 Domestic workers ............................................................................... 42 Other categories of workers excluded ................................................. 44 Conclusion ................................................................................................................ 46 Chapter III Minimum wage fixing machinery ............................................................................ 49 Section 1. Minimum wage fixed by the public authorities without consultation with the social partners ................................................................................... 50 Section 2. Minimum wages fixed by the public authorities after consultation with the social partners ................................................................................... 51 Section 3. Minimum wages fixed on a tripartite basis ............................................... 59 Section 4. Minimum wages fixed by collective bargaining ........................................ 62 Conclusion ................................................................................................................ 66 Chapter IV Variations in coverage of minimum wages ............................................................ 69 Section 1. Minimum wage of general application ...................................................... 70 Section 2. Minimum wages by geographical area .................................................... 72 Section 3. Minimum wages by sector ....................................................................... 75 Section 4. Minimum wages by occupational category .............................................. 78 Section 5. Minimum wages differentiated by other criteria ........................................ 82 1. Differentiation on grounds of sex ............................................................. 83 2. Different minimum wages for young workers ........................................... 84 3. Different minimum wages for apprentices and trainee workers ................ 90 4. Different minimum wages for migrant workers ......................................... 94 5. Different minimum wages for workers with disabilities ............................. 97 Conclusion ................................................................................................................ 99 viii ILC.103/III/1B Contents Chapter V Consultation and participation of the social partners and other actors .............. 101 Section 1. Consultation and participation of employers’ and workers’ organizations ........................................................................................... 102 1. General remarks...................................................................................... 102 2. Representativity of employers’ and workers’ organizations ...................... 104 3. Participation of organizations in the designation of their representatives ........................................................................................ 106 4. Participation of employers’ and workers’ organizations on an equal footing ............................................................................................ 109 5. Consultation and participation of the social partners in practice ............... 110 Section 2. Participation of persons representing the general interests of the country ...................................................................................................