Chapter 1: What is a minimum wage

1.8 Hourly or monthly rates?

In principle, minimum wages can be set for an hour of work, a week of work, a month of work – or any other time period.

Belgium, Estonia, France, Luxembourg, Malaysia, Romania and Ukraine all provide both an hourly and a monthly minimum wage. By contrast, the United Kingdom and the United States only provide an hourly minimum wage and Malta only has a weekly minimum wage.

There are advantages and disadvantages of the various minimum wage units.

If a monthly, weekly or daily rate is set, workers should be paid in exchange for normal hours of work of a full-time worker
, as specified in the country’s labour laws. Overtime payments should be excluded from the calculations of minimum wages. Having to work overtime to receive the legal minimum is a form of non-compliance. For part-time workers, the amount of the minimum wage should be proportional to their working hours.

Hourly minimum wages facilitate equal treatment between full- and part-time employees, by providing additional information to workers and employers. Hourly minimum wages are especially relevant for certain categories of workers who are in a situation of partial legal coverage – they are covered by minimum wage legislation, but not by working time provisions.

This is frequently the case for domestic workers, 56.6 per cent of whom are excluded from limits on working time worldwide.1 This means that they have no protection from excessive working hours or any right to payment for hours worked which exceed the standard working week for workers who are covered by the legislation.

Some countries have set higher hourly minimum wages for workers who work short hours. In South Africa, for example, hourly rates are higher for workers working less than 27 hours per week.

1 ILO (2013). Domestic workers across the world: Global and regional statistics and the extent of legal protection, (Geneva, ILO).