Being shortchanged at work: Wage theft

DO you know that holding employee wages down to boost short-term profits is usually a big mistake most organisations make? While the main mission of any business is to make money, it should not be done at the expense of employees. Employees are your most important asset and without excellent employees, the likelihood of success is not high. Ultimately, the less competitive your wages are the worse your employees will be, meaning you get what you pay for as an organisation.

Wage theft is a reality, hence workers’ rights and workplace discrimination should not be ignored. If you check three professionals with the same qualifications and experience — one working for a government institution, others private company and a local non-governmental organisation — you will be shocked by the variances in wages. Wage theft comes in various forms either through dishonesty in the payment of wages or failing to pay the actual wage. In all this the dilemma is left to the employees to either resign or endure the situation.

Failure to pay what workers deserve is wage theft and it is a clear violation of international labour standards, as well as national legislation on employment. Workers of all types, in all industries can fall victim to wage theft, hence it’s a subject that needs to be unpacked and discussed as many fall victim to it. The number of workers going for months without wages or with mismatched wages is on the rise, contributing to disintegration of families, high rates of poverty and the number of the working poor.

What is wage theft?

When companies do not pay employees all the money they are owed, intentionally, that is considered wage theft. Wage theft refers to any activities, actions or practices that prevent workers from receiving their lawfully earned or contractually promised compensation. In other words, wage theft can simply mean the non-payment or underpayment of earned wages to employees by employers. This failure to pay what workers are legally entitled to can be called wage theft; in essence, it involves employers taking money that belongs to employees and keeping it for themselves. When employers get away with wage theft, it creates an unfair advantage over honest employees.

Protection of employees’ rights.

Section 6 of the Labour Act, which speaks to the protection of employees’ right to fair labour standards, states that: “No employer shall pay any employee a wage which is lower than that to fair labour specified for such employee by law or by agreement made under this Act.”

In section 12 the Act goes on to obligate the employer to provide particulars of the employee’s remuneration, its manner of calculation and the intervals at which it will be paid.

Section 12a states that remuneration payable in money shall not be paid to an employee by way of promissory notes, vouchers, coupons or in any form other than legal tender.

These provisions and sections of the Labour Act clearly spell out the obligation of the employer in terms of remuneration, how it should be paid.

Failure to abide by them becomes an unfair labour standard in the form of wage theft.

Examples of wage theft

Not paying a worker at all. Failure to pay what workers are legally entitled to is wage theft, where employers take money that belongs to employees and keep it for themselves.

This is a clear violation of international labour standards, as well as national legislation on employment. Notably, this violation of the right to be paid for one’s work is common in the public as well as private sectors.

And, while governmental institutions in Zimbabwe are complicity in these violations, top managers continue to receive high salaries and generous benefits. Wage theft is endemic, and no group of workers is immune, including workers earning good wages. All workers have their wages stolen, though low wage workers are particularly vulnerable.

Paying below minimum wage

Minimum wage violations in particular are most prevalent in the industries that employ a lot of low-wage workers like service industries.

Statutory Instrument 81 of 2020, which may be cited as the Labour Relations (Specification of Minimum Wages) (Amendment) Notice, 2020 (No 15), specifies a new minimum wage. In this scenario if an employer decides not to pay the employees minimum wages it becomes wage theft.

The employer may apply to the appropriate NEC’s for exemption from paying the minimum wage stating the reasons. In the case that the employer is not regulated by an employment council, applications shall be made to the Public Service, Labour and Social Welfare ministry and exemptions will be granted on the basis that the employer provides nonmonetary benefits of a quantifiable value to employees.

Non-payment of overtime

Overtime disputes are so common between employers and workers with employers requiring free labour and workers wanting to make more money through overtime.

The normal eight-hour working day, lunch break, and overtime compensation all stem from wage and hour provision.

Limitations on how long an employee can be required to work and how much they must be paid for exceeding those limits are crucial and need to be discussed.

Overtime provides your employees with a source of supplementary income without having to spread their loyalty to other employers.

However, one of the problems that it could bring is non-payment. Unpaid overtime can lead to tension within a company.

So, make sure that if you do introduce it, you can afford to pay employees.

The impact of wage theft

Wages play a fundamental role in the distribution of income and reduction of poverty and economic growth.

Wage theft results in a host of problems such as growing inequality, social exclusion, a rise in crime or even social and political unrest and mass demonstrations.

Any deduction that brings an employee to a level of compensation lower than minimum wage is illegal. Many employees are walking to work to reduce transport costs, requiring them to get up before dawn to be able to make it to work by 8am which is not good — all this is a result of wage theft.

Companies involved in wage theft must be held accountable by the Labour ministry who together with representatives of employers and unions, should review the status of companies that are not paying their workers and assist in developing plans to rectify the injustice.

More so unions representing workers in companies not paying salaries — in full and on time — should demand that the government institute criminal proceedings under the relevant provisions of the Labour Act.