Global Minimum Wage Policies: A Guide for Employers in 2024

If you want to expand your business globally, there are many local regulations to consider while planning the expansion. One of the laws that can affect your business expansion plans is the minimum wage requirement in the country you’re looking to hire from.

Since it will significantly impact your expansion budget, it's important to know which countries have this policy. It will also be beneficial to understand how much your new employees will expect from you each month depending on their country.

So, let’s discuss all there is to know about minimum wage policies.

What is the Minimum Wage Policy?

The minimum wage policy is the lowest amount an employer can pay in the form of wages or a salary to their employees for their work. It differs by country, but it is a globally accepted tool to ensure workers are paid enough to be able to afford a living.

Many factors influence the minimum wage policy, which is why the amount varies from a few dollars to a hundred dollars per day. Some of the factors include cost of living, industry-specific factors, regional economic standards, and labor market dynamics. Minimum wage requirements also change following changes in these factors.

Let’s get more country-specific so that you can estimate better whether an expansion into another country will be profitable.

Which countries have a minimum wage policy?

Research of over 200 countries worldwide shows that only 16 countries have no statutory minimum wage policy. This means that you will have to learn and meet the minimum wage in about 90% of countries. In others, employers have to meet the union-bargained industry standard and negotiate the salary with the new employee.

Minimum wage policies in Asia

Asia’s minimum wage policies differ drastically across the continent. It includes countries with some of the highest and lowest minimum wages in the world.

One of the countries with the lowest minimum wage policy in the world is India. There, the minimum wage policy average stands at $2.16 per day. Its monthly lowest minimum wage policy is slightly better than some other Asian countries at $45 per month. This does, however, depend on state, industry, and skills. For example, in Delhi, the minimum monthly wage has been increased to $210.17 for unskilled workers.

Just below India on the list of countries with the lowest monthly minimum wage policy are Kyrgyzstan and Sri Lanka. Their minimum wage policies are $28 and $39 per month, respectively. Myanmar and Tajikistan are slightly better, with $48 and $55 as minimum wage. In the Philippines, the minimum wage is $186.97.

The country with the highest minimum wage in Asia is South Korea, where the average monthly minimum pay is $1,209. It’s followed closely by Japan, whose lowest hourly pay equals $6.61.

Taiwan and Hong Kong also offer some of the highest monthly minimum wages, at $870 and $860, respectively.

Minimum wage policies in Europe

Similarly to Asia, minimum wage policies in Europe also vary significantly. Europe is home to countries with the highest minimum wages in the world.

The country with the highest minimum wage policy is Luxembourg, which promises its workers a minimum of $3,357 per month. The Netherlands is the second, at $2,425, followed by Germany with $2,269.

Other countries in Europe have higher minimum monthly wages, such as Sweden, Switzerland, and Denmark. However, these are not legal policies and are a result of negotiations between employers and employee unions.

Eastern European countries are on the lowest spectrum. North Macedonia has the lowest minimum wage policy in Europe at $398. It’s followed by Albania, Bulgaria, and Turkey, which stand at $420, $520, and $664 respectively.

Minimum wage policies in Latin America

Most Latin American countries have a minimum wage policy, and these range from $3.61 per month in Venezuela to $696 in Costa Rica. Most of these monthly minimum wages are in stark contrast to the one in Mexico, for example, as the average wage in Mexico stands around $1,695 per month.

On the lower end of monthly minimum wage policies are Argentina and Nicaragua with $191 per month. The fourth lowest is the Dominican Republic, with a minimum monthly wage of $253 per month.

Among Latin America's countries with the highest minimum monthly wages are Uruguay, Chile, and Panama. Their minimum wages are $567, $499, and $490 respectively.

In Latin America, almost all countries have 13th-month pay, and some even fourteenth, which helps employees meet the cost of living.

What is the lowest minimum wage in the US?

All covered and non-exempt Americans are entitled to a minimum wage under ​​The Fair Labor Standards Act.

The minimum wage in America is $7.25 per hour. This doesn’t apply to employees who receive tips. For them, the minimum hourly wage is $2.13. However, if this amount with the tips doesn’t meet the required $7.25, the employers must make up for the difference.

However, each state has the right to set its minimum wages independent of the federal ones. The majority of the US states have exercised this right.

For example, the federal minimum wage applies in Oklahoma, Kentucky, and Idaho, to name a few.

On the other hand, the minimum hourly wage in D.C. stands at $17, followed by Washington with $16.28, and California with $16.

Minimum wage policies in Australia

Australia also has a minimum wage policy, that’s set at $23.23 per hour. This policy was brought on July 2023, and Australia re-evaluates the minimum wage each July.

However, there are several types of minimum wages in Australia. These also depend on employment type, age of employees, and work capacity. For example, there are “Junior pay rates”, and “Social and community services industry pay rates.” It also has annualized wage arrangements. Make sure to inform yourself about what type of minimum wages you’d have to pay to your new employees who live in Australia.

In New Zealand, the minimum wage is set at $22.70 per hour. It also includes provisions for 16- and 17-year-old employees, for which the rate is set at $18.16. Training minimum wage is the same amount and applies to employees involved in an industry training program.

Countries that don’t have minimum wage requirements

There is only a handful of countries that don’t have a minimum wage requirement. The minimum the employer has to offer is set by either collective bargaining agreement (CBA) or union requirements.

Nordic countries:

Minimum wage policies don’t exist in most Nordic countries, including Norway, Sweden, Finland, Denmark, and Iceland:

1. Norway:

In Norway, workers rely on trade unions to negotiate the minimum salary, which is why Norway’s minimum wage differs across industries. The average monthly pay in Norway is around 53,150 krone per month, according to the Norwegian Statistical Office. It translates roughly to $5,000 per month.

The highest-paying economy sector in Norway is “Mining and quarrying,” with an average salary of $7,725 per month. The lowest is “Accommodation and meals,” where the average salary is around $3,410 per month.

2. Finland:

Similar rules apply in Finland, where there’s no minimum wage policy, but it is rather negotiated by trade unions per sector. On average, after taxes, Finns earn around $2,600 per month.

According to Statistics Finland, the highest-paying sector in Finland is “information and communication." It pays around $26 per hour. The lowest-paying sector is “Administrative and support services” with approximately $14 per hour.

3. Denmark:

Denmark is another country without a minimum wage policy. Unions in Denmark cover 80-90% of all of its workers, so the minimum wage is based on their collective bargaining agreement. The salary also depends on several factors, including the employee’s qualifications, complexity of work, age, and more.

On average, Danish employees are entitled to a wage of about $15 per hour. The monthly salary averages about $5,000, pre-taxes. Income taxes are very high in Denmark, around 52.07%.

4. Iceland:

Iceland is another country in Europe that doesn’t have a minimum wage policy. Some sectors of industry that are covered by unions depend on their collective bargaining agreement. With others, it is a negotiation between an employer and an employee.

However, Icelandic Store and Office Workers' Union statistics show that the average minimum wage pay in Iceland is at $2,455 per month. The average salary, after taxes, is fairly close to that number, standing around $2,575 per month.

5. Sweden:

Similarly to neighboring countries, the minimum wage in Sweden is also based on the CBA. It depends on the industry, and, according to Sweden's Central Bureau of Statistics, it averages between $1,500 to $2,000 per month. This is after taxes, which are some of the highest in Europe.

The highest-paying industry in Sweden is “finance and insurance.” On average, workers in this industry can expect a monthly salary of approximately $6,200 per month. Similarly to Norway, the lowest-paying sector is “Accommodation and food”, which pays $3,130 per month.

The Swedes also pay a significant amount in taxes, in some cases even 50%. However, when the average is calculated for Sweden, its minimum wage is one of the highest in Europe.

Italy:

Italy is another one of the countries with no minimum wage policies. It also relies on collective agreements for setting the minimum payments per industry. On average, the minimum hourly wage is around $7.

The industries with the highest minimum wages in Italy are “Banking and Insurance”, with a minimum wage of $1,970.93 for bankers. The lowest is at $629.15 for household staff such as nannies and caretakers.

Singapore:

Singapore also bases its minimum wage amounts on the collective agreement, cost of living, and other factors. Employers looking to hire in Singapore are responsible for offering their new employees competitive wages.

Foreign employers can rely on the form available on Singapore’s Ministry of Manpower’s website to help them determine what a fair wage would be.

Switzerland:

Switzerland is one of the most prosperous countries in the world. Similarly to other countries listed above, Switzerland's minimum wage depends on collective agreements between employers and employees. It also differs nationwide, region-wide, and on a corporate level.

It may be interesting to know that Switzerland tried to implement the minimum wage policy at the federal level. But, it was refused by a whopping three-quarters of Swiss voters. There are a few cantons that have accepted the minimum wage policy, which stands around $22 per hour.

According to Swiss statistics, the average wage in Switzerland is about $7,180. The highest-paying sector is “Financial and insurance”. The lowest-paying is “Accommodation and food”.

What are some of the consequences of not meeting minimum wage rates?

If you are hiring a global team, keeping track of the minimum wage requirement in each country you hire may be troublesome. Some countries update the minimum wage requirements each year. In other countries, the minimum wage requirement differs on a county or a city level.

This shouldn’t deter you, since with a good Employer of Record you can outsource these legalities while hiring. Still, if you decide to expand to another country, knowing these requirements may save you from some high fees and penalties.

FAQ:

What country has the highest minimum wage?

Luxembourg has the highest minimum wage of all the countries worldwide. The highest minimum wage in Luxembourg for unskilled workers is $2,798, while for qualified employees it stands at $3,357 per month.

What is the minimum wage in Europe?

The minimum wages in Europe vary by country and may range from $477 in Bulgaria to $2,798 in Luxembourg. There are also several countries in Europe without a minimum wage policy, including some Nordic countries, Italy, and Switzerland.

Which country has the lowest salary?

Sudan is the country with the lowest salary worldwide, as it promises its workers $0.71 per month.