Terms of Reference
From exclusion to inclusion: how minimum wages have been fixed for domestic workers
1. Background
Earning an income to secure a livelihood for themselves and their families is the central concern and
motivation of workers when offering their labour – and in this respect, domestic workers are like all
other workers. Domestic workers care for our families and most valuable possessions, and on
average work excessively long hours with little to no rest. Yet, domestic workers typically are at the
lowest end of the wage distribution, often working in the informal economy, and rarely enjoy
adequate legal protections. Recent statistics published by the ILO have found that about half of all
domestic workers (or approximately 22.4 million) do not enjoy minimum wage coverage, despite the
generally held principle that fixing minimum wages is done precisely to protect those most
vulnerable workers. Moreover, 83% of all domestic workers are women, representing an important
share of female wage employment – and therefore also suggesting that low minimum wage
coverage results in an important gender pay gap. Domestic workers also have a low level of
individual and collective bargaining power, which leaves them disempowered to negotiate for higher
wages and claim those wages that often go unpaid.
The adoption of ILO Convention 189 on decent work for domestic workers, 2011, marked an
important turning point for domestic workers worldwide. For the first time at the international level,
domestic workers were recognized as real workers, meaning that they should enjoy rights equivalent
to those enjoyed by workers generally, including with respect to remuneration: Article 11 of ILO
Convention 189 states that domestic workers should enjoy minimum wage coverage, where such
coverage exists, and that remuneration is established without discrimination based on sex. The
Convention further stipulates that domestic workers shall be paid directly in cash (with the option, in
certain cases, to be transferred to the worker by a variety of means) at regular intervals at least once
a month. (Art 12)
Another area of concern relating to remuneration in domestic work is the matter of payment in kind.
ILO Convention 189 states that only a limited proportion of the remuneration of domestic workers is
allowed to be paid in kind, and only in conditions that are not less favourable than those generally
applicable to other categories of workers. Moreover, the consent of the worker is required, and it
should be clear that what is provided for in kind is for the personal use and benefit of the worker,
and that the value attributed to these is fair and reasonable. (Art. 12) The ILO estimates that 9.0
million domestic workers can receive part of the minimum wage in kind, while 21.1million (40.1%)
are entitled to receive their full minimum wage in cash only. In practice however, it is likely that
payment in kind is frequently used abusively.
2. Purpose of the research
As the Convention was adopted with overwhelming support, governments have begun to revise
their laws, policies, and programmes, to extend more effective protections to domestic workers in
line with the provisions of the Convention. Minimum wage setting is one important area in which
the ILO has received requests for technical assistance, including accounts of how other countries
have set the minimum wage for domestic workers. The questions received by Member states can be
summarized as why, how and at what level to set the minimum wage for domestic workers,
considering both the need to protect workers’ rights, and the common concern that setting a
minimum wage for the sector could cause loss of employment and/or an increase in informality.
Although domestic work is work like any other, and therefore should receive equal treatment to
other workers, it is a sector that also has specific characteristics that must be taken into account.
Three factors in fact differentiate domestic work from other sectors: first, while ensuring compliance
with minimum wage levels is challenging in general, it is even more so for domestic workers as their
work takes place in private homes, which are at best difficult for labour inspectorates to reach.
Setting a minimum wage for domestic workers therefore presents a possible risk of low compliance
rates, thereby increasing informality or causing loss of employment. A second significant difference
in minimum wage setting for domestic workers is the fact that employers are not enterprises, which
presents challenges to setting a minimum wage based on ability to pay and productivity. Other
criteria for wage setting therefore must be considered. Finally, in many countries, trade unions and
employers’ associations do not yet represent the domestic work sector, which can cause
complications in countries where the minimum wage is usually fixed through collective bargaining.
As previously mentioned, domestic workers are also frequently paid a portion of their wages in kind;
in setting the minimum wage therefore, governments must also consider how the practice of
payment in kind is taken into account when fixing the minimum wage.
Gaps clearly remain in the extension of minimum wage protection and the ways in which limited inkind payments are allowed and related to the minimum wage level. As governments progressively
act to improve legislation, a variety of questions arise, such as: what are the systems that were used
to extend minimum wage protection to domestic workers? What criteria have been used to set the
level of the minimum wage? How have other countries provided equal treatment, while taking into
account the specific situation of domestic workers? And beneath it all, what motivated other
governments to extend minimum wage laws to domestic workers? What was the outcome of the
methods used?
3. Scope of the research
To assist governments, workers and employers in extending effective minimum wage protection to
domestic workers, the ILO has initiated a research project to document the process through which
domestic workers have gone from being excluded to being included in minimum wage protections.
The research will consist of a series of case studies on countries that have explicitly gone through the
process of setting a minimum wage for domestic workers. Countries selected reflect two approaches
to inclusion, namely, sectoral minimum wage setting in consultation with a tripartite body, and
inclusion into the national minimum wage by progressively increase the minimum wage of domestic
workers. The points to be addressed in the research can be found in the attached matrix.
Portugal
Portugal first established MWs in the early 1970s. Shortly thereafter, in 1978, a MW rate was set for
domestic workers, albeit at a lower level than for agricultural workers and workers generally. The
minimum wage was then increased progressively, until it met the general minimum wage rate.
4. Tasks of the consultant
The following terms of reference are to conduct one country case study on Portugal to document
the process through which domestic workers were included into the minimum wage, including both
socio-political and technical aspects, and locating the process in a historical context of minimum
wage setting practices in the country. Specifically, the consultant should verify and complete the
information in the matrix (attached), and produce a written report corresponding to the following
outline and questions:
I.
Overall picture of the current minimum wage in place
In the introductory section, please describe, briefly: the wage setting tradition in Portugal; current
type of minimum wage coverage; the current type of coverage enjoyed by domestic workers and the
wage level set, including, where they exist, salary scales, differing occupational wages (eg, live-in,
live-out, part-time, caregivers, cooks, etc.), inclusion (or not) of payment in kind, relation to hours
worked, and any rates established for overtime, stand-by or night hours. Please also include, if
available, statistics on the number of domestic workers and employment share of domestic work for
the latest year available.
II.
Why
Why was the process of including domestic workers into the minimum wage first initiated? Who, if
anyone, was it initiated by? What was the deciding factor in setting minimum wages for domestic
workers in the 1970s? Political? Ethical? Other? What was the role of workers’ and employers’
organizations, and other stakeholders? Were domestic workers or their employers involved? What
were the government’s hesitations, if any, before including them?
III.
How
In this section, please explain how the current wage coverage of domestic workers was achieved,
including through which mechanisms and procedures the wage was set, considerations and criteria
used, and role of domestic workers, their employers, civil society, as well as traditional social
partners.
1.
2.
3.
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6.
7.
A. Mechanism/Procedure
What mechanism was established to set the minimum wage for domestic workers? Please
describe. Why was the mechanism chosen, as opposed to collective bargaining, or other wage
setting system?
How was the mechanism established?
What were the tasks of this mechanism?
What was the process (step by step) of setting the initial minimum wage level? Which parts of
the mechanism and procedure were tripartite, if any? Were domestic workers included? Or
their employers?
Was the MW of domestic workers intended to increase progressively at the outset? If not, when
was it decided to progressively increase their minimum wage level to match that of the general
minimum wage?
What process was established to increase the wage level, and how was the time frame chosen?
Was there a system established for making adjustments to the minimum wage?
1.
2.
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5.
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2.
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B. Criteria
What criteria were selected to set the minimum wage generally? Were the same criteria used
to set the initial minimum wage for domestic workers? And to increase it? How were these
criteria and factors decided on? On the basis of what evidence or other factors?
Was there a discussion about the specificities of the working hours of domestic workers,
including linkage to wage rates? If so, what was the debate, and what was the outcome?
Was there discussion of setting specific rates for overtime? Stand-by? Night work? If these were
included, how were they assessed in relation to the minimum wage?
Was payment in kind included? If so, how, and what was the outcome?
What were the criteria chosen for making adjustments to the wage?
IV.
Considerations and key issues
In addition to the criteria covered above, what other considerations were taken into account to
ensure an effective minimum wage?
What were the key issues discussed? What were the key concerns of the government?
Workers? Employers?
What key issues were discussed related to the progressive increase of the wage?
What discussions took place regarding the difference between live-in and live-out domestic
workers?
What were the specific points that arose with regard to: payment in kind, relation of working
hours to minimum wage, salary scale, rate of pay for overtime, night work and stand-by?
What were the noteworthy challenges faced and lessons learned along the way?
V.
Implementation and compliance
1. What methods of implementation and enforcement were foreseen and/or undertaken, if any?
Are they functional?
2. Did the government take action to raise awareness about the new minimum wage once it was
established? What kinds of activities were undertaken? What awareness raising activities were
undertaken by trade unions or other stakeholders?
VI.
Outcome
1. What is the opinion of key stakeholders about the process and criteria used, and the outcome
(including the type of mechanism established, the procedure used, and the wage level set)?
2. What was the outcome of the minimum wage fixing process? (This item would consist of a
review of existing literature, where it exists, notably on compliance, the impact of the minimum
wage on declared work, employment, and working conditions, inter alia.)
Methodology
The questions should be answered through a combination of desk review and interviews with key
informants. Definitions of terms used can be found in the TRAVAIL legal and minimum wage
databases. The consultant should refer to these also to draft a general context in which to situate
the answer to these questions.
Short forms of the answers should be provided in the table, and a longer narrative report should also
be drafted, using the outline provided above.
Tasks of the ILO
The ILO will develop a matrix of questions to be answered, to be taken as the scope of the research
to be respected by the consultant. The ILO will also provide guidance to the consultant during
research, and review final written work.
Timeframe
1 September: beginning of contractual period
31 October: submission of first full draft
22 November: submission of final draft.
Payment terms
Professional fee 5,000 USD
Final products to deliver: completed matrix and completed case study on Portugal
50% of the fees upon completion and submission of a first draft.
50% of total fees upon completion of the country case study report and questions matrix to the
satisfaction of the ILO.