Definition
- For a contract between an employer and an employee to be valid, it must always be entered into voluntarily and with mutual consent.
- A government has not legitimate reason to interfere with consensual agreements which do not cause harm others.
- Much of employment regulation criminalizes victimless acts. Such criminalization is, then, coercive and, thus, the regulation iitslef is contrary to the Legal Principle.
- For example, minimum wage laws prohibit parties from voluntarily agreeing to an employment contract at a wage below certain thresholds. By artificially raising the ‘minimum wage’ threshold, some low-skilled workers who want to work are priced out of the market - as a result of the state intervention, their real minimum wage becomes zero.