Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/330883 
Year of Publication: 
2024
Citation: 
[Journal:] European Journal of Law and Economics [ISSN:] 1572-9990 [Volume:] 60 [Issue:] 2 [Publisher:] Springer US [Place:] New York, NY [Year:] 2024 [Pages:] 365-402
Publisher: 
Springer US, New York, NY
Abstract: 
We analyse how co-determination is related to 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 correlation between non-compliance and the difference between the minimum wage and the wage actually paid.
Subjects: 
Co-determination
Labour law
Minimum wages
Socio-economic panel (SOEP)
Non-compliance
Works councils
JEL: 
J30
J53
K31
K42
M54
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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