Services
Impactt Principles and Guidelines for the Rectification of Non-Payment of Wages
To access the full version and short version of the guidelines, please scroll down to the ‘downloads’ section at the bottom of this page.
Introduction
In many employment contexts around the world, workers, and particularly migrant workers, face various forms of non-payment of wages. As noted by the International Labour Organisation (ILO) in its guidance note on wage protection for migrant workers, “working time and wages are the working conditions that have the most direct and tangible effect on the everyday lives of workers and employers.” Impactt’s fieldwork globally has found the same, noting consistently that workers’ top priority is income, no matter the sector or region. Taking action to ensure this income is paid legally and without interference is therefore critical to worker welfare, and critical in order to address debt bondage and forced labour.
Employers are legally responsible for ensuring that wage-related abuses do not occur in their operations. This means they must implement robust wage-payment systems and maintain meaningful dialogue on wages and wage payment with their workforce, as well as engaging with trade unions, or other collective bargaining processes. In contexts where effective trade unions and collective bargaining processes exist, these should always provide the primary vehicle for addressing wage-related issues in collaboration with employers.
However:
- Withholding of wages often takes place in countries or sectors where workers have limited collective bargaining power, where there is limited enforcement and among businesses that either lack the will or capacity to resolve the issues.
- Calculating and implementing repayments owed can be complex and intimidating for those that do not have experience with this. At the same time, it is essential that repayments are made quickly, to eliminate the negative impacts on workers, including potential bonded labour. Buyers have a responsibility to support in this process.
These guidelines recommend 8 practical steps to ensure that repayments can be carried out quickly and accurately. Best practice steps are recommended on top of those outlined under minimum recommendations, unless otherwise specified.
Guidelines for rectification of non-payment of wages in 8 steps – overview
| Step | Who? |
What action? Minimum Recommendation |
What action? Best practice |
Timeline |
|---|---|---|---|---|
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STEP 1: |
Goal: Investigation type selected is appropriate to the scale and scope of the wage issues identified. |
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Buyers/employers in consultation with third party experts. Investigation should be funded by those who have caused, contributed or are directly linked to the non-payment of wages. |
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Within 2 weeks of issue being identified. |
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Step 2: |
Goal: Workers are informed about their rights, the investigation process and grievance mechanisms they can use to report any grievances (including wage-related grievances) prior to the investigation and on an ongoing basis. |
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Employer in collaboration with trade unions, worker representatives or other relevant stakeholders. |
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As soon as possible after identification of issue and determination of investigation approach. |
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Step 3: |
Goal: The investigation confirms (a) the existence of wage theft, and/or non-payment of wages (b) whether or not workers are compelled to remain at their employer, and (c) gathers reliable data on wage theft and non-payment of wages for all workers employed. |
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Employer, buyer, third party expert or accredited financial services firm. Investigation should be funded by those who have caused, contributed or are directly linked to the non-payment of wages. |
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The investigation should be started as soon as possible and within 1 month of the issue being identified. The total duration will be dependent on the size of the workforce to be interviewed and scale of the problem. It is important to consider practicality and prioritise fast repayment to worker over perfection. |
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Step 4: |
Goal: The repayment amount is accurately calculated based on reliably collected data and represents the actual value of money workers should have received, considering interest, inflation, lost opportunity cost and compensation where appropriate. |
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Third party expert or accredited financial services firm. |
Calculate the repayment amount on an individual basis for each affected worker including:
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Additional compensation for damages suffered as a result of wage theft. This can include:
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Within 2 weeks from completion of the investigation. |
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Step 5: |
Goal: All current and former workers that are owed wages are included on the list of eligible workers to be paid, informed about the proposed payment amount and given the opportunity to participate in negotiation processes to determine final payment amounts. |
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Employers, trade unions, worker representatives. |
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Maximum of 1 month negotiation period. |
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Step 6: |
Goal: Workers are repaid their wages as quickly as possible through transparent channels |
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Employer (with support from buyers/investors if needed). |
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As quickly as possible, within 3 months maximum. |
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Step 7: |
Goal: Management systems are created and/or improved to ensure no re-occurrence of issues, prioritising (if applicable) any areas which the investigation found were particularly linked to workers being compelled to remain at their employer. |
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Employer (with support from buyers/independent third-party experts if needed). |
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As quickly as possible, but within 3 months after issue first identified. |
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Step 8: Verify payment and implementation of new management systems |
Goal: A reputable independent third party verifies that all repayments have been made correctly, without any negative consequences for workers. |
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Independent third party. |
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On completion of payments to workers. |
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Core principles of rectification of non-payment of wages
The following core principles should underpin any activities related to implementation of the repayment guidelines. To guide implementors to act in accordance with international best practices, the principles are aligned with the UNGPs. They are also outlined within our Core Principles of Repayment within our Principles and Guidelines for Repayment of Recruitment Fees & Costs.
- Protect workers. All stakeholders involved in the repayment process must take steps to ensure that all workers and their families are protected from harm and retaliation throughout the repayment process. This includes putting in place non-retaliation policies and agreements, training investigators to be responsive to workers’ needs, and providing workers with access to transparent, equitable and legitimate grievance mechanisms, through which they can report anonymously and without fear of reprisal or blacklisting.
- Ensure worker agency. Worker agency and participation in the repayment process is critical to any best practice approach. Rather than being passive recipients of payments that have been determined by other stakeholders, workers should be involved across all key stages of the repayment process, including investigation, repayment calculation, and verification. A lack of meaningful worker agency or social dialogue limits the robustness of the repayment process and may therefore significantly limit the overall effectiveness of the intended remedy.
- Commit to transparency and disclosure. All stakeholders should engage transparently in all aspects of the repayment process and disclose relevant information required for repayment-related activities. Payments should be made in a transparent manner (i.e., via bank transfers) and the remediation approach taken (and amounts if appropriate) should be publicly disclosed, for example through website postings and/or press release.
- Engage workers and other stakeholders in meaningful collaboration. All stakeholders should collaborate in good faith towards the common goal of providing effective repayment of withheld wages to workers as quickly and effectively as possible. The repayment plan should be developed collaboratively, ensuring engagement with and inputs from workers, their representatives, and other stakeholders including employers, labour recruiters, buyers, investors, and CSOs. Workers should know where they can access key information to fully understand the payments they receive monthly.
- Ensure oversight, quality and integrity of the repayment process. Stakeholders should implement a representative governing body that provides oversight of the repayment process and implements mechanisms to ensure and monitor the quality and integrity of all repayment-related activities (including the prevention of fraud). Where possible or appropriate, third parties should be involved in investigation or verification processes to add credibility, expertise and independence to all aspects of the process. While controls should be in place to avoid significant fraud or abuse of the repayment scheme, these controls should not interfere unduly with eligible workers ability and incentive to access repayments.
- Provide workers with access to alternative channels for remedy. Workers should always be informed about their rights and any state-based mechanisms through which they can access remedy. Employers can do this through various channels, including inductions, trainings, and on-site posters. Further, beyond wage-related issues, in many cases the investigation into non-payment of wages may also identify other issues which require a wider range of remedy to be provided. Provide workers with referrals to other support services (e.g., medical, legal, psychosocial etc.) in such cases. Where the repayment process identifies corrupt or criminal activity, stakeholders should collaborate to pursue criminal justice. This includes supporting workers to pursue additional compensation through state-based mechanisms where possible and appropriate.
- Integrate shared learning. Lessons learned throughout the repayment process should be shared among all stakeholders involved and used to strengthen company policies and practices related to employment and regular and accurate payment of migrant workers, to ensure non-repetition of future exploitative practices.
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