Under the Wage Floor:
Exploring firms' incentives to comply with the minimum wage
(with Lindsay Judge)
Resolution Foundation Briefing Note, January 2020



In this paper, we explore the incentives for firms to comply with the National Living Wage/National Minimum Wage (NLW/NMW) in the United Kingdom. We document the penalties that firms are subject to both in theory and in practice if caught underpaying the NLW/NMW; estimate their current upper bound rate of detection; and show that even if detection rates increased significantly they would need to go hand-in-hand with higher financial penalties to provide firms with a hard, economic incentive to comply with the law.

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