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Living wage not equivalent to minimum wage

26 Jul 2023 at 06:39hrs | Views
Working poverty is a reality worldwide. For many workers, a job does not provide a way out of poverty for them and their families. A living wage is not necessarily equivalent to the minimum wage. Minimum wages in principle establish a wage floor for all workers, to ensure that their basic needs and those of their families are met. Companies have an important role to play to advance decent work and address working poverty in their operations and supply chains by improving and promoting living wages. One of the fundamental rights of the employees is the right to fair wages, but it seems as if a lot are being shortchanged at work.

Why is a living wage important?

A living wage is not the same as a statutory minimum wage. It is a wage that allows a worker to afford a decent standard of living for themselves and family. A living wage should be earned in a regular work week and is specific as it is dependent on the costs of living in a particular place. Receiving a living wage helps to break cycles of poverty by ensuring that pay is sufficient to cover household essentials as well as occasional emergencies or unexpected expenses. A living wage is a bare-bones calculation that looks at the amount that a family of four needs to earn to meet their expenses. The living wage includes costs like rent and groceries as well as items like extended healthcare and two weeks savings for each adult. It does not include debt repayment or savings for future plans.

Workers' fundamental rights

Every person has the right to fair and safe labour practices and standards and to be paid a fair and reasonable wage. Failure to pay a living wage is wage theft and it is a clear violation of international labour standards, as well as national legislation on the employment of workers. Wage theft is a reality, hence worker rights and workplace discrimination should not be ignored. If you check different professionals with the same qualifications and experience - one working for a government institution, the other for a private company or a local non-governmental organisation - you will notice variances in wages. Wage theft comes in various forms, either being dishonest in the payments of wages or failing to pay the actual wages. The push for a living wage is a response to the fact that minimum wages - for different reasons -  often fail to meet workers' needs.

What is wage theft?

When companies intentionally do not pay employees all the money they're owed, 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 and when employers get away with wage theft, it creates an unfair advantage over honest employees. Workers of all types, in all industries can fall victim to wage theft, hence it's a subject that need to be unpacked and discussed as many are victim to it.

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 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 spells 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.

Dilemma of wage theft

Failure to pay what workers are legally entitled to is wage theft, where employers will be taking money that belongs to their employees and keeping it to themselves. This is a clear violation of international labour standards, as well as national legislation on the employment of workers. 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 complicit 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 - born workers also have their wages stolen, though low wage earners 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 (No15), specifies a new minimum wage. In this scenario the employer cannot just decide not to pay the employees minimum wages it becomes wage theft. The employer may apply to the appropriate Nec 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 minister and an exemption will be granted on the basis that the employer provides non-monetary benefits of a quantifiable value to its employees.

Non-payment of overtime

Overtime disputes are such unending disputes between employers and workers with employers wanting free labour and workers wanting to make more money through overtime. The normal 8-hour work days, lunch breaks, and overtime compensation all stem from wage and hour provisions. Limitations on how long an employee can be required to work and how much they must be paid for exceeding those limits are supposed to be discussed. Overtime provides your employees with a source of supplemental income without having to spread their loyalty to other employers. However, one of the problems that it could bring is when it's unpaid. Unpaid overtime can lead to a lot of tension within the company. So, make sure that if you do introduce it, you can afford to pay.

Escalating inflation has employers and compensation managers puzzling over their compensation strategies. Just a day ago a medical aid provider wrote a memo that they will notify clients of their monthly subscription later in fear of are continuous increase in prices. Cost of living, cost of labour, minimum wage and living wage are not even matching they are spinning around in our heads like uninvited guests.

Emmanuel Zvada is an award-winning 2020 Most Fabulous Global HR Practitioner, HR disrupter and trusted coach. For comments inbox or call +263771467441

Source - newsday
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