What is Minimum wage?
Minimum wage refers to the lowest legal amount an employee can get paid by the employer.
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Minimum wage definition
Minimum wage refers to the lowest legal amount an employee can get paid by the employer. Most countries have some kind of minimum wage legislation set by the government. Minimum wage differs from place to place.
Components of minimum wage
1. Basic contract-agreed wage.
2. Shift based payments and allowances including irregular working hours.
3. Fixed payments based on the turnover of the company in a particular period.
4. Payments by a third party such as tips.
Importance of minimum wage
Minimum wage laws regulate and help in:
- preventing employee exploitation
- reducing poverty
- improving standards of living
- boosting confidence and morale
- forcing employers to become efficient.