Every worker has the right to just and favourable conditions of work, including to be paid fair wages for their work.
Deducting money out of an employee’s wages before they are paid in full and without their consent is an unauthorised deduction. This may give rise to a situation of debt bondage, a form of modern slavery. Migrant workers are at higher risk of debt bondage due to recruitment or visa fees, unauthorized deductions from wages, and lack of access to support networks.
The ILO has outlined three key principles relating to the protection of wages. First, deductions of any type, to be lawful, require an appropriate legal basis (e.g., national laws and regulations or collective agreements). Second, all authorized deductions must be limited to ensure workers can have a decent living income (the net amount of wages received by workers should ordinarily be a sufficient living wage). Third, in the case of deductions, workers must have the relevant information regarding the grounds for wage deductions communicated to them in advance of any wage or salary decrease.
Disciplinary deductions (deductions aimed at disciplining a worker) may be unauthorized where there is no basis in law for doing so. Similarly, payment in kind (substituting a salary for accommodation or food) can be a form of unauthorized deduction. This is particularly prevalent among migrant workers and domestic workers, as they are often wholly reliant on their employer for accommodation, food or other resources.
Businesses must avoid unauthorized salary deductions or deductions made without the employee’s knowledge, and undertake due diligence to ensure other businesses in its supply chain do not engage in such activities.