Chapter 8: Minimum wages for domestic workers

8.10 Payment in kind

Under certain circumstances ILO Convention No.95 allows for the partial payment of wages in-kind, particularly when such form of payment is customary, appropriate for the personal use and benefit of workers and their families, and the value of such allowances is faior and reasonable. See section 1.6 for a review.

To summarise:

  • Domestic workers should be entitled to conditions that are not less favourable than for workers generally.
  • When setting a minimum wage for domestic workers, it should be paid in cash.
  • If payments in kind are to be allowed, the terms cannot be less favourable than for workers generally; they should be limited to the personal use and benefit of the worker and their family; they should be fairly and objectively valued; and they should not unduly diminish the remuneration necessary for the needs of domestic workers and their families.
  • If domestic workers are required to live in, no deductions from the remuneration for accommodation should be allowed, unless agreed to by the worker.

The impact of payment in kind in domestic work

In domestic work, it is quite common for a portion of the wage to be paid in kind. Domestic workers who live in the homes of their employers in particular receive monthly cash wages below the average because they receive accommodation. Employers of domestic workers may also provide meals that are deducted from the wage paid, whether they live in or out.

While receiving food and accommodation from the employer can be of benefit to the domestic worker, and of expense to the employer, receiving such payments in kind as part of the minimum wage makes these workers more dependent on the employer. This can have negative long-term impacts on their pension and other contributory social security schemes that are based on income.

In addition, a domestic worker who lives in the home of their employer may well be receiving accommodation, but it also means that in case of an unresolvable dispute, that worker would lose both job and shelter. Moreover, domestic workers must earn sufficient amounts in cash in order to provide shelter and food for their own families, while saving enough for their future and that of their families’.

The Committee of Experts has also reinforced the notion that payments in kind do not necessarily benefit the worker. In the General Survey on the reports concerning the Protection of Wages Convention, 1949 (No. 95), and the Protection of Wages Recommendation, 1949 (No. 85), the Committee of Experts states that:

"Paying remuneration in the form of allowances in kind, that is to say providing goods and services instead of freely exchangeable legal tender, tends to limit the financial income of workers and is therefore a questionable practice. Even in those industries or occupations in which such a method payment is long-established and well-received by the workers concerned, there is still a need for safeguards and legislative protection against the risk of abuse."

Limiting payment in kind

Recognizing the high prevalence and the sometimes abusive practices of paying domestic workers in kind – and the risks that workers face as a result – Convention No. 189 explicitly states that domestic workers are to be paid in cash, like workers generally. It places strict limits on the proportion of the wage that can be paid in kind, when such payments can be made, and what they can include, under conditions not less favourable than those enjoyed by workers generally. 

A limited proportion of the remuneration in the form of payments in kind may be allowed, under the following conditions:
  • Payments in kind cannot be less favourable than those generally applicable to other categories of workers.
  • The worker must agree to the payments in kind.
  • The payments in kind must be for the personal use and benefit of the worker; and
  • The monetary value attributed to such payments in kind must be fair and reasonable. (Art. 12(2))
Paragraph 14 of the Domestic Workers Recommendation, 2011 (No. 201), provides further guidance on how policy-makers can ensure that payments in kind are not abused. These provisions are also in line with those contained in Article 4 of Convention No. 95, which also aims to protect workers from abusive or excessive payments in kind. It equally applies to domestic workers

When provision is made for the payment in kind of a limited proportion of the remuneration, Members should consider:

(a) establishing an overall limit on the proportion of the remuneration that may be paid in kind so as not to diminish unduly the remuneration necessary for the maintenance of domestic workers and their families;

(b) calculating the monetary value of payments in kind by reference to objective criteria such as market value, cost price or prices fixed by public authorities, as appropriate;

(c) limiting payments in kind to those clearly appropriate for the personal use and benefit of the domestic worker, such as food and accommodation;

(d) ensuring that, when a domestic worker is required to live in accommodation provided by the household, no deduction may be made from the remuneration with respect to that accommodation, unless otherwise agreed to by the worker; and

(e) ensuring that items directly related to the performance of domestic work, such as uniforms, tools or protective equipment, and their cleaning and maintenance, are not considered as payment in kind and their cost is not deducted from the remuneration of the domestic worker. (para. 14)

While the Convention and Recommendation do not fix a specific threshold for payments in kind, the Committee of Experts has expressed doubt concerning payment in kind that exceeds 50 per cent of the wage (see section 1.6)

These measures ensure the effectiveness of the minimum wage protections. By ensuring that domestic workers earn sufficient remuneration in cash, policy-makers are effectively protecting them from unacceptable forms of work and situations of abuse that they may face in the homes of their employers.

In practice