Work and Wages

This page was last updated on: 2021-01-27

Minimum Wage

In accordance with the Labour Act 1985, the Minister has the authority to specify the minimum wage and benefits for any class of employees in any undertaking or industry; require employers to grant or negotiate increments on annual income of such minimum amount or percentage as he/she may specify; and prohibit the payment of less than such specified minimum wage, benefits or increments to such class of employees.

The Minister may appoint advisory councils to investigate and make recommendations to him or her, in connection with wages, salaries or benefits, on the fixing of minimum wages and benefits for employees or any other matters that may relate to minimum wage notice.

Minimum wages are usually issued for industries not covered by the employment councils. Criteria for establishing minimum wage have not been determined by the Labour Act.

Compliance of minimum wage is ensured by the labour inspectorate. If an employee is earning less than minimum wages, he/she can complain to the Ministry of Labour Officials.  A person who contravenes a notice issued by the Minister is liable to pay a fine not exceeding level seven and/or imprisonment for a period of two years.

Source: §20(1), 21. 25(a) & 27 of the Labour Act 1985

Regular Pay

In accordance with the Labour Act 1985, wages should be paid at regular intervals on working days at or near the workplace directly to the employee unless stated otherwise. Remuneration payable in money should not be paid to an employee by way of promissory notes, vouchers, coupons, liquor etc.

Remuneration in kind cannot substitute entirely for remuneration in money.  In-kind payment is allowed only in following conditions: if it is appropriate for the personal use and benefit of the employee and the employee’s family; the value attributed to such payment is fair and reasonable; equipment or clothing required to protect the health and safety of the employee must not be computed as part of the remuneration of the employee; payment is not made in the form of liquor or drugs; and the remuneration in kind cannot substitute entirely for remuneration in cash.

Employer is, generally, not allowed to deduct wages except is certain cases provided by the law. The aggregate amount of permissible deductions that may be made from the remuneration of any employee in any pay interval may not exceed 25% of the employee’s gross remuneration for that interval.

Source: §12(A) of the Labour Act 1985

Regulations on Work and Wages

  • Labour Act, 2005