More people must be punished for wage theft

Two workers in orange overalls and yellow hard hats work on laying rebar at a construction site.

Caritas believes that labor market crime must be prioritized in the same way as other crimes. On January 1, 2022, wage theft was included in the Penal Code, but so far employers have gotten away with it on a large scale.

At the time of writing, only one employer has been sentenced to compensation and a suspended prison sentence. The verdict marks a significant step forward in the fight against labor crime in Norway and gives hope that more employers will be punished for wage theft. More cases are entering the legal system, but progress is too slow, according to Caritas.

Employment crime must be reported more often and investigations must be prioritized to a greater extent. For this to become a reality, far more resources are needed - for the police districts, the Norwegian Labour Inspection Authority and the A-crime centers. The same applies to the voluntary sector, which has an important role to play in uncovering exploitation and helping those who are exploited.

helena Aanstad, legal advisor at Caritas Norway

Legal assistance at Caritas

Caritas has a team of lawyers who help employees who are exploited in Norwegian working life. The demand is so great that we have at times had to introduce an intake freeze in order to handle the enormous volume of cases.

Helene Aanstad says that Caritas is contacted by employees who experience severe underpayment, loss of holiday pay and overtime supplements. Others are ordered to work during unpaid breaks or instructed to be available without being paid for the time they are available to the employer. We also find that employers speculate on withholding wages so that foreign employees cannot manage financially and have to return to their home country. From there, it becomes difficult to hold the employer accountable.

She adds that some employers are bankrupting themselves to avoid paying what they owe. Caritas is also seeing more and more creative solutions, where employers are demanding "payback" by paying collectively agreed or universally agreed wages, and then demanding that part of the wages are paid back.

Targeting the most vulnerable

The social consequence is that businesses that underpay employees and make a profit as a result of reduced operating costs outcompete law-abiding employers. Employment crime like this causes society a loss of many billions every year. In addition, it affects some of the most vulnerable in society, employees who can neither afford to pay for a lawyer themselves, nor are entitled to have it covered by the state legal aid scheme.

Labor market crime must be prioritized in the same way as other crime, with reporting and investigation of criminal offenses. The government is clear that the work against social dumping and labor market crime is a priority area, but we need more action and a more holistic perspective. For example, it is important that administrative fines do not become a resting place for the police. Although the first conviction is an important milestone, many challenges remain. Criminalization alone will not solve the problem," says Aanstad.

Helena aanstad, legal advisor at caritas norway
The legal team at Caritas Resource Center consists of (from left) lawyers Helena Aanstad and Maria Reiten Hindahl, responsible lawyer Lejla Malaku Valsgaard and senior advisor Fernando Baez (Photo: Anette Skomsøy/Caritas Norway)
The legal team at Caritas Resource Center consists of (from left) lawyers Helena Aanstad and Maria Reiten Hindahl, responsible lawyer Lejla Malaku Valsgaard and senior advisor Fernando Baez (Photo: Anette Skomsøy/Caritas Norway)

Hoping for more trials

Per Olav Skurdal Hopsø, State Secretary at the Ministry of Employment and Social Inclusion, says he agrees that wage theft should be prosecuted more often than it is today. He believes the verdict from last fall is a milestone, and hopes it will be a door opener for future cases.

Hopsø says that the government is implementing efforts on a broad front to ensure the most serious working life possible without social dumping and labor market crime.

Secure employees in full-time and permanent positions are the most important protection against exploitation and social dumping,

Per Olav Skurdal Hopsø State Secretary at the Ministry of Employment and Social Inclusion

He adds that the government has significantly strengthened the Labor Inspection Authority's budget since we took over and is now also working to give the Authority more tools in the fight against violations in working life.

The agency has been tasked with having a clear presence and visibility in Norwegian working life, and will react strictly against serious breaches of the regulations. The government is also working to improve cooperation between the Norwegian Labor Inspection Authority, the police, the Norwegian Tax Administration and NAV. I believe that serious labor market crime should be reported to the police and the use of fines should be increased.

Per Olav Skurdal Hopsø State Secretary at the Ministry of Employment and Social Inclusion

Senior communications advisor at the Ministry of Justice Merete Romestrand states in an email that the Office of the Director of Public Prosecutions was asked last fall to provide an assessment of why the provisions on wage theft appear to be little used. Based on the Director of Public Prosecutions' input, she emphasizes the following:

  • The introduction of the wage theft provisions may in itself have had a preventive effect.
  • Investigations take time, and there are several cases coming up for trial.

Considering evaluation of the legislation

The Ministry of Justice says that the agencies are experiencing more challenges in cases of wage theft. The Ministry is therefore in dialogue with the Director of Public Prosecutions, the Norwegian Police Directorate and Økokrim about a possible evaluation of the new criminal provisions. In addition, the agencies in the area of unemployment insurance crime are currently working on an assignment in the area of employment crime, for which they are expecting a response soon. The Ministry believes it is natural to await this work before discussing new measures or regulatory adjustments.

The first conviction for wage theft

A restaurant owner in Askim in Østfold is the first person to be convicted of stealing employees' wages after wage theft was included in the Penal Code.

He was sentenced to 30 days' suspended imprisonment and must pay almost a quarter of a million in compensation. This is the first conviction of its kind. The woman started working as a waitress at the restaurant in question back in June 2020. The woman worked six hours, six days a week. For this, she was generally paid NOK 15,000 a month until she left the job after two years.

In the hospitality industry, wages are universal. This means that it is illegal to pay below the minimum wage in the collective agreement for the industry. The wages she received were far below what she was entitled to. The defendant confessed to all the charges in court, and was also sentenced to 30 days' suspended imprisonment. The verdict was unanimous and will not be appealed.

This is what the Penal Code says about wage theft

  • § Section 395 Wage theft

    Anyone who improperly and with the intention of unjustified gain for themselves or others breaches the obligation to pay wages, holiday pay or other remuneration to which the employee is entitled under an agreement or provision in a law or regulation, shall be punished by a fine or imprisonment for up to two years.
  • § 396. Aggravated wage theft

    Aggravated wage theft is punishable by a fine or imprisonment of up to 6 years. When deciding whether the theft is aggravated, particular emphasis shall be placed on whether the violation concerns a significant value, has a systematic or organized character or for other reasons is particularly offensive or harmful to society.