Work and Wages

Minimum Wage

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

The Government establishes wages Advisory Board, which is responsible for fixing and updating the minimum wage on annual basis. This Board consists of representatives of the employees and employers, as well as independent members. The Board may after consultation among its members, make a proposal to the Minister for Labour on the minimum wage level. The Minister can then decide to implement the same through a wage order. In addition, the Minister may also implement any minimum wage that has been agreed upon through collective bargaining if the parties to the negotiations represent a significant proportion of the workforce.

Labor officers (Authorized by the Labour Code) are responsible for monitoring compliance of the minimum wage legislation. In the pursuance of their duties, they may inspect the workplace, ask questions from employees and request provision of information on working conditions. In the case of non-compliance, law provides for fine of up to 300 maloti or a punishment by imprisonment for a period of up to 03 months depending on the seriousness of the offence. In addition, 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.

Minimum wage has been set differently for different sectors of the industry. They are further classified on the basis 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: §14, 17, 18, 34, & 47-60 of the Labour Code, 1992

Regular Pay

The term “wages” has been defined in the Labour Code as any remuneration or earnings, however designated or calculated, capable of being expressed in terms of money, fixed by law or by a mutual agreement made in accordance with the Code, and payable by virtue of 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 daily basis;
  2. Contract for less than a month: wage payment on weekly basis;
  3. Contract for more than a month: wage payment on 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. The employer may, on agreement with the employee, give partial remuneration in addition to money wages in the form of food or a dwelling place.  Wages must be paid on working days and at or near the workplace.

When paying wages to employees, the employer may only deduct amounts corresponding to 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 50% of the wages.

Source: §03 & 81-85 of the Labour Code, 1992


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