VINAYA LAW FIRM

Labour: The Law On Minimum Wage

Date of publication: 21-09-2018


Category: Legal updates


Audience: All


Promulgated on 6th July 2018 and abrogating former Article 104, 105, 106, 107, 108 and 109 of the Labour Law, the Law on Minimum Wage aims at improving the livelihood and living conditions of employees and promoting a more attractive business and investment environment.

In this matter, the law sets a minimum wage for the persons covered by the provisions of the Labour Law, a procedure for setting the minimum wage according to a scientific method, social, economic criteria, and creates the National Council on Minimum Wage (NCMW). 

1.    The legal regime of the minimum wage

The Law provides that the wage for any work with the equal condition, skill and equal output, regardless of origin, sex, age or profession shall be at least equal to the minimum wage, which is set by a Prakas issued by the MLVT, and entered into force from 1st January of the following year.

The guaranteed minimum wage can fluctuate according to areas and economic conditions but in any case, any agreement providing the minimum wage to employees less than the minimum wage set by the Prakas is deemed null and void.

Indeed, for wages determined upon the output produced by the employee, the employer must add any amount to the wage to equal the guaranteed minimum wage if the employee's output produced is lower than the output produced necessarily to equal the minimum wage. 

2.    Creation of the National Council on Minimum Wage

Additionally, the Law creates the NCMW which will be composed of 48 members appointed by Prakas and organized in a tripartite repartition in which one-third of the members are representatives of the Royal Government, one-third of the members are representatives of the employees and the last third of the members are representatives of the employers.

In order to preserve the representation of the employees in the NCMW, the Law provides that any employer having an employee as a member of the NCMW must afford time for the said employee to attend an official meeting related to the tasks of the NCMW and must pay the employee as if he/she is working.

Furthermore, among the 48 members, sits as the chairman of the NCMW, the Minister of MLVT (or one representative of MLVT) and sit as vice-chairmen two members elected from the representatives of the employers and the representatives of employees respectively.

Once regularly composed, the NCMW will have the responsibility of conducting and facilitating scientific research on tasks related to the minimum wage. In addition, the NCMW will provide recommendations on the minimum wage, other benefits and the extent of the implementation of the minimum wage for the Minister of MLVT.

Moreover, the NCMW will have to disseminate and raise awareness and social dialogue on the minimum wage. In addition, the NCMW will have to carry out other duties related to the minimum wage at the request of the Minister of MLVT. In some cases where it is deemed necessary, the NCMW will have the faculty to create a technical working group in order to assist the NCMW in fulfilling its duties. In any case, the NCMW will always be assisted by the General Secretariat of the NCMW, whose organization and functioning will be determined by a Sub-decree.

3.    The procedure for Setting the Minimum Wage

Furthermore, the Law provides the procedure for setting the minimum wage. The Minister of MLVT will bear the main obligation in setting the minimum wage. In this matter, the Minister will have to take into consideration social criteria (including family status, inflation and costs of living), economic criteria (including productivity, competitiveness of the country, the labour market status and profitability of the sector) and the decision resulting from the discussion of minimum wage by the NCMW.

Indeed, the NCMW will set a discussion on setting the minimum wage. The said discussion must be scheduled by the Minister of MLVT, and the discussion must result in a decision adopted unanimously or by the majority of its members.

Once the decision is adopted, the Minister of MLVT will deem it as a recommendation before issuing a Prakas on the minimum wage for the following year. Consequently, the Prakas will be posted in every working room, wage payment office and hiring place.

4.    Sanctions

To conclude, the Law grants the authority to the Minister of MLVT to punish infringement to the law by issuing a written notice and/or a fine (up to USD 10,000) according to the type of infringement. In addition to the notice and the fine, an employer who has paid their employees less than the minimum wage must pay back to the employees the amount difference.

Moreover, Article 28 of the Law provides that issuance of any penalty by the Minister of MLVT does not impede the punishment by Trade Union Law, Labour Law or Criminal Law, of the violation of the Law on Minimum Wage if such violation falls under the scope of the said punishment.