%0 Report
        %A Goerke, Laszlo
%A Pannenberg, Markus
        %T Minimum Wage Non-compliance: The Role of Co-determination
        %D 2023
        %8 2023 Nov
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 16621
        %U https://www.iza.org/publications/dp16621
        %X We analyse in what way co-determination affects non-compliance with the German minimum wage, which was introduced in 2015. The Works Constitution Act (WCA), the law regulating co-determination at the plant level, provides works councils with indirect means to ensure compliance with the statutory minimum wage. Based on this legal situation, our theoretical model predicts that non-compliance is less likely in co-determined firms because works councils enhance the enforcement of the law. The economic correlates of co-determination, such as higher productivity and wages, affect non-compliance in opposite directions. The empirical analysis, using data from the German Socio-economic Panel (SOEP) for the years 2016 and 2019, demonstrates that non-compliance occurs less often for employees in co-determined establishments, while there is no impact on the difference between the minimum wage and the amount, which was actually paid. Therefore, co-determination helps to secure the payment of minimum wages.
        %K co-determination
%K labour law
%K minimum wages
%K Socio-economic Panel (SOEP)
%K non-compliance
%K works councils