Work and Wages

Minimum Wage

The main provisions on the setting of minimum wages are contained in the Labour Code.

The Government has established the Wages and Conditions of Employment Advisory Board, which is responsible for fixing and updating the minimum wage. This Board consists of representatives of the employees and employers, as well as independent members.

The Wages and Conditions of Employment Advisory Board advises the Minister on matters related to wages and employment conditions. The Board:

• recommends proposals for minimum wages in specific sectors, and submits these recommendations to the Minister.
• submits wage orders that set minimum wages and employment conditions for certain workers and
• conducts necessary investigations to support its proposals.
• notifies relevant stakeholders, allowing a 30-day period for public input on wage recommendations,
• considers representations from the public, and may adjust its proposals accordingly.

If the Minister refers recommendations back, the Board reviews and resubmits them, with or without amendments.

While making recommendations to the Minister concerning minimum wages, the Wages and Conditions of Employment Advisory Board considers several factors, including:

• the affordability of proposed changes and their impact on employment, particularly on small, medium, and micro-enterprises;
• the cost of living; poverty alleviation;
• minimum subsistence levels;
• existing collective agreements,
• International Labour Organization (ILO) standards,
• productivity levels, and available social security benefits.

Labour inspectors (Authorized by the Labour Act) are responsible for ensuring compliance with the labour standards in the workplace.Their duties include: inspect the workplace, ask questions from employees and request provision of information on working conditions.

In the case of non-compliance with a wage order, the law provides for:

• a fine of up to 3000 maloti or punishment by imprisonment for a period of up to 18 months or both depending on the seriousness of the offence.
• a court can also order the payment of the salary that the worker was entitled to earn.
• In case of non-compliance with the court order, the employer can be punished by imprisonment for a period of up to 6 months.

The minimum wage has been set differently for different sectors of the industry. They are further classified on the basis of the term of occupation and skill level. Examples of such sectors include: clothing textile and leather manufacturing; construction; wholesale and retail; retail (other than small business); hospitality; service; transport and other driver’s small business; and domestic workers (including light physical workers).

Source: §19, 20, 21 & 65, 168 & 173 of the Labour Act, 2024 (Act No. 3 of 2024)

For updated minimum wage rates, please refer to the section on minimum wage.

Regular Pay

The term “wages” has been defined in the Labour Act as any remuneration or earnings that capable of being expressed in terms of money, fixed by law or by a mutual agreement made in accordance with the Act, and payable under a written or unwritten contract of employment to an employed person for work done or to be done or for service rendered or to be rendered.

Wages can be paid daily, weekly or on a monthly basis depending on the type of work contract as follows:

1. Contract at piece rate: wage payment on a daily basis;
2. Contract for less than a month: wage payment on a weekly basis;
3. Contract for more than a month: wage payment on a monthly basis; and
4. Contract for completion of a task: wage payment on completion of the concerned task

Generally, wages are to be paid in legal tender only. However, the employer may give partial remuneration in addition to monetary wages in the form of food or a dwelling place, if agreed upon by employee. Wages must be paid on working days and at or near the workplace.

When paying wages to employees, the employer may only deduct amounts for following reasons:

• income tax;
• contributions to any provident,
• medical or pension funds;
• any amount ordered by a court of law;
• trade union dues;
• loss or damage caused by an employee;
• deduction of wage for unauthorized absence and repayment of loans.

However, the total amount of the deductions, which are made at one time from any wages payable, cannot exceed one-third (33%) of the wages payable at the end of the month without prior approval from the Labour Commissioner.

In cases of employment termination, all wages, including overtime pay and additional allowances, are due on the last day of employment and must be paid by the following working day. If the employer requires the worker to attend on a different day for payment, the employer must cover any reasonable travel or subsistence expenses incurred by the worker. If a worker is dismissed, all wages owed up to the date of dismissal must be paid on that same day.

Source: §04 & 176-180 of the Labour Act, 2024 (Act No. 3 of 2024)