The Protection of Wages Act, 2026 is expected to come into force soon. It repeals and replaces the Protection of Wages Act, Cap. 351, modernises the rules on paying wages in Barbados and gives the Chief Labour Officer stronger enforcement powers. The Act is to be read together with the Employment Rights Act, 2012, and prevails where the two conflict. Here is what employers need to know.
Certainty and Consistency in Pay
Every employer must set a recurring pay period and pay day. Wages must be paid no later than the pay day and on a normal working day (s. 3(3)). How often wages must be paid depends on how they are calculated (s. 3(5)):
- Weekly: for hourly, daily and weekly wages
- Fortnightly: at least, for fortnightly wages
- Monthly: at least, for all other wages
Wages must be paid in Barbados legal tender (s. 3(1)). The only exception is for employers holding a foreign currency permit, who may pay into a foreign currency account (s. 4). The employer chooses the payment method from those listed in the Act, such as cash, cheque, wire transfer or direct deposit (s. 3(6)), but must give 2 weeks’ written notice of any change, and the change must not cost the employee anything or impose a burden on the employee (s. 3(8)). The employee chooses the bank into which wages are paid (s. 3(9)).
If an employee is not at the usual place of payment on pay day, the employer must pay the wages to any person the employee has authorised in writing (s. 6). When employment ends, all wages and other sums due must be paid no later than the pay day of the next pay period (s. 18).
Wages Belong to the Employee
The Act protects the employee’s control over wages in three ways:
- Employers may not dictate where, how or with whom wages are spent (s. 5).
- Wages may not be paid in a retail shop, on premises where alcohol is sold, or on premises used for entertainment or gambling, unless the employee works at those premises and the employer owns or occupies them (s. 16).
- Non-cash benefits may be given by agreement in addition to wages, but must be of personal benefit to the employee and his family and of fair and reasonable value, and may never take the form of alcohol, drugs or any illegal substance (s. 15).
Employer Advances
Employers may advance wages at the employee’s request. Recovery is capped at one-third of wages per pay period (s. 7(2)), and no interest, discount or similar charge may be made (s. 10). An advance made in breach of the Act cannot be recovered in court (s. 11). The one-third cap and the prohibition on interest do not apply where the employer is a financial institution, credit union or other lender and the loan is made in the ordinary course of its business (s. 7(3)).
Salary Deductions Require Written Consent
An employer may deduct wages for pension contributions, and for payment to a third party, such as a lender, at the employee’s request or under a wage assignment (s. 8). Every such deduction requires the employee’s written consent, unless another law requires the deduction (s. 9).
The deducted money must be paid over to the person entitled to it. An employer who deducts wages for a third party and fails to pay them over commits an offence. On summary conviction, the employer is liable to a fine of $30,000, 3 years’ imprisonment, or both (s. 25(2)). The magistrate may also order the employer to repay the employee, with interest (s. 25(4)).
No Penalising Employees Through Their Pay
Except where the Act or another law expressly permits it, an employer may not deduct wages (s. 13(1)):
- to recover a payment owed to the employer, for example for goods or services sold to the employee;
- for the benefit of the employer or a person connected with the employer;
- to impose a fine;
- for bad or negligent work; or
- for damage to the employer’s materials or property.
Deductions for damage caused by the employee’s wilful misconduct or negligence are permitted. Even then, the employer must give written notice of the deduction, stating the reason, the amount and how the employee may appeal. The notice period is 1 week, 2 weeks or 1 month, depending on the pay period. The deduction is capped at one-third of wages per pay period (s. 13(2) to (4)).
Recovering Overpayments
Employers may recover wages paid in error (s. 14(1)). They may also recover state benefits, such as NIS sickness, maternity or employment injury benefit, received by an employee who was also paid full salary for the same period. The amount recovered cannot exceed the wages paid for the period the benefit covers (s. 14(2)). Three limits apply:
- No more than one-third of wages may be recovered in any pay period (s. 14(3)).
- The employer must give written notice of at least one pay period (s. 14(4)(a)).
- Recovery must begin within one year of the overpayment (s. 14(4)(b)). Old overpayments discovered later, for example when final pay or gratuity is calculated, are likely to be irrecoverable from wages.
Inclusive Communication
The Act also requires inclusive communication. Notices to employees with special needs must be given by a method they can readily receive and understand (s. 19). This applies to every notice the Act requires, including notice of a change in payment method, a proposed deduction or the recovery of an overpayment. In practice, this may mean providing notices in large print, braille or audio format, or explaining them in person.
Complaints and Enforcement
An employee may complain to the Employment Rights Tribunal, through the Chief Labour Officer, within 3 months of an alleged breach (ss. 20(1), 21). Trade unions and representative groups may also complain on the employee’s behalf (s. 20(2)). The Tribunal may hear a late complaint if it was not reasonably practicable to file it in time (s. 20(2)(c)).
Unlawful deductions and failure to pay wages are offences, punishable on summary conviction by a fine of $20,000, 12 months’ imprisonment, or both (s. 25(1)). Prosecutions may be brought within 3 years of the offence (s. 25(6)). An employer can escape penalty by proving that it used due diligence and that another person committed the offence without its knowledge, consent or connivance (s. 26). Sections 2 to 19 also bind the State as employer, although breaches involving public officers are dealt with as grievances under the Public Service Act (s. 28).
Is Your House in Order?
Employers should now review their employment contracts, payroll schedules, deduction authorisations and overpayment practices to ensure they comply from day one, as the Act contains no transitional provisions.
This article is for general information only and does not constitute legal advice. For guidance on how the Act applies to your organisation, contact us at:
HAMEL-SMITH CARIBBEAN
Neils Road, Haggatt Hall
St. Michael
www.caribbeanlaw.com