Wage theft

Retrieved from Yrkestrafikk edition 1 in 202 2.

Just as it is a criminal offence for an employee to steal from their employer, it has now also become a criminal offence for an employer to “steal” from their employees’ wages. This means that an employer who does not pay wages, holiday pay or other types of compensation to which an employee is entitled can be reported and punished for this. The penalty for wage theft is a fine or imprisonment for up to two years. Aggravated wage theft can be punished by up to six years in prison.

The new provisions are in the Penal Code, Sections 395 and 396. The fact that the provisions are placed in the Penal Code and not the Working Environment Act is, among other things, to emphasize that it is just as serious to enrich oneself from one's employees' wages as it is for an employee to steal from their employer. This is an important signal.

What is wage theft?

An employer can be punished for wage theft if the person concerned "improperly and with intent to gain unjustified gain for himself or others breaches the obligation to provide wages, holiday pay or other compensation to which the employee is entitled under an agreement or provision in law or regulation."

The provision is intended to cover cases where employers deliberately and in order to enrich themselves fail to pay wages or other benefits to their employees. In other words, only employers who "unduly and with the intention of unjustified gain" fail to pay the correct wages can be punished.

The starting point is always that failure to fulfill a salary obligation should be considered improper. It is only if one has an honorable reason for not paying the salary that one is not considered improper. An example of an honorable reason for not paying the correct salary is, for example, an employer who is about to go bankrupt, and prioritizes covering debts before salaries, to ensure that the employees still have a job to go to. However, it is not the case that poor finances in the company should automatically lead to impunity.

What is gross wage theft?

The most serious cases of wage theft can be punished with imprisonment of up to 6 years.

Wage theft is serious if it:

• Applies to a significant value. The limit for what is considered a significant value is NOK 100,000.

• Has a systematic or organized feel.
• Or for other reasons is particularly offensive or harmful to society.

What is not wage theft?

It is not wage theft if the employer fails to pay wages to an employee who has not been at work. This is because the employee is not entitled to wages. Even if the employment contract states that the employee is entitled to wages, this is conditional on the employee actually performing work.

What types of wages are protected?

All compensation associated with work that an employee has performed for their employer will be covered by the wage theft provision. This includes salary, vacation pay and other compensation to which the employee is entitled, either through agreement or statutory provisions.

Typical contractual obligations are:

• Wage provisions in collective agreements (including collective agreement-based overtime allowances and inconvenience allowances).
• Salary provisions in your individual employment contract.

Typical statutory obligations are:

• Generalized minimum wage.
• Overtime bonus of at least 40 percent.
• Vacation pay.
• Diet.

In addition, employers who make unlawful wage deductions may also be punished for wage theft.

The clear starting point under the new legal provisions is that any failure to pay wages, holiday pay and other benefits is considered wage theft and is punishable. The employer cannot blame the person concerned for not being aware of the rules that apply, for example, the general minimum wage for overtime in the industry. If the employee is entitled to overtime by law or agreement, it is a criminal offence to fail to pay this. It is the employer's responsibility to clarify what wages and other benefits the employee is entitled to.