This article studies minimum wage non-compliance in Honduras, a dual labor market
with high wage floors that are weakly enforced. However, rather than just counting
how many workers earn sub-minimum wages, I also estimate violation indices
that measure compliance at the intensive margin. I first explore cross-sectional heterogeneity
in violations using household survey data. Then, I quantify compliance
adjustments to minimum wage hikes by comparing indices before and after a large
unexpected increase. Results show substantial differences in non-compliance across
industries, location, and coverage status. Violations worsen with rising minima, but
less in in more compliant sectors.