Minimum Wage
How is the minimum wage set? (through legislation, collective bargaining, etc?
The minimum wage in Liberia is set under the Decent Work Act. A Minimum Wage Board, established under the Act, is responsible for reviewing and recommending minimum wages. These recommendations are submitted to the Minister of Labour and published in the Official Gazette to become law.
Is there a separate minimum wage legislation? (Provision in Constitution, Labour Code or other specific legislation?
The Decent Work Act regulates the minimum wage in Liberia; there is no standalone legislation to regulate minimum wage.
Who determines the minimum wage in the country? (relevant actors)?
A Minimum Wage Board is established which is composed of the Minister (who serves as the Chairperson) and four other persons, appointed by the President on the recommendation of the National Tripartite Council.
What are the criteria for determining or updating the minimum wage?
To determine minimum wage, the Board must weigh the following six considerations every time it reviews or recommends minimum wages:
- Purposes of the Act – i.e., the broader goal of promoting decent work for all employees.
- Fundamental labour rights set out in Chapter 2 of the Act (non-discrimination, freedom of association, safe work, etc.).
- Costs of living and prevailing living standards in the community.
- Need for wages to be high enough to maintain employees’ and their families’ health, efficiency and general well-being.
- State of economic development and growth, including overall business productivity.
- Likely impact of any wage increase on business competitiveness and viability.
The Board may recommend different minimum wages for various sectors and occupations and, where relevant, use piece rates in certain industries. In its initial recommendations, the Board must consider the appropriate methods and time frame for introducing new minimum wage levels. The Minister is responsible for ensuring the effective functioning of the Minimum Wage Board by providing necessary support.
Is the updating of the minimum wage regulated by Law? When is the minimum wage updated?
After reviewing minimum wages, the Board must submit its written recommendations to the Minister within 60 days, providing clear reasons for its decisions based on evidence. The Minister is then required to publish the recommended wage rates in the Official Gazette of Liberia within 60 days. The minimum wage order takes effect from the date of its publication. The Board is tasked with reviewing and recommending minimum wages that support the achievement of decent work in Liberia.
Does the Law provide that the minimum wage must cover the living expenses of the employee?
While reviewing minimum wages, the Board must consider the cost of living and prevailing living standards in the community. Moreover, wages must be set at a level high enough to maintain employees’ and their families’ health, efficiency and general well-being.
Does one or more minimum wage(s) exist? (national, sectoral, occupational, regional, etc)
All formal sector workers, including those in industries, businesses, and companies, are entitled to a minimum wage. Domestic and casual workers are entitled to a minimum wage. The Minimum Wage Board may recommend different minimum wages for different economic sectors and occupations.
Any employment contract that sets wages below the minimum wage rate established by law is considered null and void.
Is there a government institution for minimum wage complaints?
A labour inspector has the authority to enforce compliance with fundamental rights by utilising the provisions of the Decent Work Act. The labour inspectors are responsible for the enforcement of minimum wage orders. A labour inspector may bring a verified complaint in writing to the Ministry to enforce compliance with the notice. The Labour Inspectorate investigates compliance with the minimum wage, as it has the authority to issue notices to individuals or employers regarding violations if a person fails or refuses to comply with such a notice.
Does the Labour Inspectorate investigate minimum wage compliance?
The labour inspector may bring a verified complaint in writing to the Ministry to enforce compliance.
Are there legal sanctions if compliance is lacking?
If the person does not take the required action specified in the notice, the labour inspector can file a verified complaint with the Ministry of Labour. The complaint must be filed within fifteen days of the date specified in the notice for compliance. If the Ministry finds that a respondent has committed or is committing a violation, it may order the respondent to pay a fine not exceeding $500.
**Sources:** §2.15, 5, 8, 16.1A and B of the Decent Work Act, 2015; §8 (chap 2) of Liberia’s constitution of 1986
Regular Pay
What does the term "wages" mean? How is it defined in the Labour Code or other relevant law on payment of wages?
The Decent Work Act defines remuneration as the ordinary, basic or minimum wage or salary and any additional emoluments whatsoever payable directly or indirectly, whether in cash or in kind, by a person to a worker and arising out of the worker’s engagement to work for that person.
The Decent Work Act requires that employment contracts between employers and employees specify the manner and frequency of wage payments and advances.
What does the law say about the regular and timely payment of wages?
An employer is required to pay wages to an employee in cash, unless the employee provides written consent for an alternative payment method. Acceptable alternatives include payment via postal order, money order, check, or a deposit at a financial institution into an account in the employee's name, or a joint account with others. Employers have a responsibility to ensure employees are paid the full amount of their earned remuneration.
Within how many days, of the end of wage payment period, should wages be paid?
An employer shall pay wages to an employee at intervals of not more than one month. It can be implied from above that wages are due and must be paid within 30 days (or the number of days in the month) following the end of the wage payment period.
What does the law say about deduction from wages?
In general, employers are required to pay employees the full amount of remuneration due, without any deduction. Employers are allowed to deduct amounts from an employee’s wages only for lawful purposes, and such deductions must be agreed upon in writing by the employee. The employee has the right to modify or revoke this written agreement once per pay period.
Deductions from wages, by agreement with the employee, however, cannot exceed one-third (1/3 or 33%) of the employee’s total remuneration. These deductions are limited to specific payments such as rent for employer-provided accommodation, goods sold by the employer, loans, or trade union dues. This is to ensure that employees are not unfairly burdened by excessive deductions.
Employers can recover overpaid wages from future earnings with written notice (as long as this is done within two months) but cannot reclaim already paid wages or require false acknowledgement of payments.
Employers may not:
- Impose fines on employees unless authorized by statute or a collective agreement;
- Require employees to buy goods or use services from the employer;
- Charge more than the employer’s cost price plus reasonable acquisition costs for goods supplied; or
- Require or permit employees to repay remuneration already duly paid or to acknowledge receipt of more than they actually received.
What are the provisions on 13th- and 14th-month pay or other compulsory bonuses?
There is no provision regarding 13th- and 14th-month pay or other compulsory bonuses in the Decent Work Act. Employers may voluntarily pay bonuses or extra compensation based on the provisions of the employment contract, company policies or collective agreement.
Sources: § 1.4, 13, 16.4, 16.5 and 16.6 of the Decent Work Act, 2015
