Chapter 8: Minimum wages for domestic workers

8.5 How should the level be set and adjusted for domestic workers?

The criteria should be the same as for all other workers, observing the principle of equal pay for work of equal value

There is a common perception that the process and criteria used to set a minimum wage for domestic workers should be different from that used for other workers. This is not the case.

The process and criteria used to set a minimum wage for domestic workers should be the same as that used for all other workers (see chapter 5). Article 3 of Convention No. 131 gives guidance on the basic criteria that should be used when establishing a minimum wage for any group of workers:

The elements to be taken into consideration in determining the level of minimum wages shall, so far as possible and appropriate in relation to national practice and conditions, include—

(a) the needs of workers and their families, taking into account the general level of wages in the country, the cost of living, social security benefits, and the relative living standards of other social groups;

(b) economic factors, including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment.

In the case of a national or regional minimum wage – where domestic workers are included in the legal scope of their application – the process of minimum wage setting is the same for all workers across the economy.

The particular effects on the domestic work sector should be considered, just as for all other sectors of the economy, in the analyses conducted by the country concerned to set a national minimum wage. However, in some countries, domestic workers are excluded from surveys. Measures should be considered to include them in data collection (see Technical Note 1 for more examples).

In general, the minimum wage for domestic workers is and should be set using the predominant system in the country concerned. Where a national minimum wage is in place, this protection should be extended to domestic workers. When sectoral wages are set, a sectoral approach should be taken, observing the principle of equal pay for work of equal value.

In countries where sectoral minimum wages are in place, minimum wages should be set using the same criteria outlined in Convention No. 131 – namely, the needs of workers and their families, and economic factors.

Gradual approaches can be used

When extending a single national minimum wage to domestic workers, in cases where they were previously excluded from the minimum wage coverage, some countries elected to provide them gradually with equality of treatment. This gradual approach involves cases where the minimum wage is initially set at a lower level than the national minimum wage in place and is gradually increased over time to equal the national minimum wage level.

The gradual approach is often based on prevailing wage rates in a particular sector and arises from employment concerns. If they are particularly low, in relation to all other sectors, a drastic increase in the wage in a particular sector could prompt considerable negative employment effects.

Such an approach was applied in the domestic work sector in countries like Portugal, Chile and Ecuador, but it has also been used in other countries for different sectors. For example, it was used for small and medium enterprises in Malaysia and for different regions in Brazil before 1984 when one national minimum wage was established.

The gradual approach, described above, has been used in cases where a national minimum wage is significantly higher than the average wage in the domestic work sector, prompting concerns about the negative effects on employment and informality if the minimum wage were to increase significantly at once. A gradual approach allows time for employers to adapt to new wage levels, with the promise of achieving equality within a clear timeline.

In these cases, a clear plan for the gradual increase is key to ensure that equality is reached within a reasonable timeframe. Otherwise, in cases where a national minimum wage is in place, and a separate and lower sectoral minimum wage is set for domestic workers, this would violate the principles of equal pay for work of equal value, and of equality of treatment in line with Convention No. 100 and Convention No. 189.

Adjusting the minimum wage

Adjusting the mimimum wage for domestic workers should be carried out in the same manner as minimum wages are adjusted for all other workers. This generally involes considering changes in the needs of workers and their families and economic factors since the previous period when the minimum wage was adjusted.

For example, this includes increases in the incomes of the households that employ domestic workers. More detailed information about adjusting minimum wages can be found in Chapter 5 and Technical Note 1.

Careful stock must be taken of the particularities of the sector

Irrespective of the approach taken, careful stock must be taken of the particularities of the sector – most notably the high prevalence and proportion of wages paid in kind, and the typically long weekly hours and lack of working time protections, such as limits on working time and right to overtime pay. These situations effectively reduce the take-home pay of domestic workers.

Indeed, if a domestic worker works 60 hours a week and is not protected by working time or overtime provisions, that person is effectively bringing home a lower wage per hour than other workers who earn the monthly minimum wage, are protected by working time legislation and work 40 hours a week. The result is inequality in the outcome of the minimum wage legislation.