Fiscal incentives to encourage worker remittances
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Hondurans take part in a new caravan of migrants, set to head to the United States, as they leave San Pedro Sula, Honduras December 9 2020. REUTERS/Jose Cabezas
Several countries are using fiscal incentives (like Sri Lanka) rather that directives to encourage migrant workers to repatriate their earnings, an international webinar on unpaid wages of migrant workers was informed on Wednesday.
The discussion titled “Unpaid Wages and Remittances: Deconstructing the Impact of COVID-19 and Ways Forward” was organised by the Philippines-based Migrant Forum in Asia. It addressed the question of how a steady flow of remittances can be maintained by ensuring that migrant workers are compensated for their work in countries of destination.
There are more than 1.5 million Sri Lankan migrant workers in other countries and last month, the 2021 budget announced an incentive of Rs. 2 for every dollar remitted by these workers. Despite the COVID-19 crisis, remittances of Sri Lankan workers have not waned.
In his presentation, Dr. Dilip Ratha from the World Bank said that there was a time when Turkey and Mexico issued mandatory directives that overseas workers should remit their money. He said the issue of COVID-19 has consequences for millions of people and has impacted the flow of remittances.
Global remittances in 2019 totalled US$550 billion and surpassed FDI flows. It’s a huge force for development, he said adding that owing to the COVID-19 pandemic it will slow down to $470 billion in 2020. Any impact on remittances affects a country’s education, providing water, etc as this money is invested in development. He said there is a need to bring down remittance costs like reducing recruitment costs. For example a Bangladesh worker pays 30-40 months’ worth of expected wages as fees even though it is illegal to charge a fee.
Ms. Ellene Sana, Executive Director, Centre for Migrant Advocacy (CMA), Philippines said that migrant workers don’t want to return home as there may be barriers in the country of work if they want to go back. However tens of thousands of workers had to reluctantly return home, some with part wages, some with nothing.
“This is massive wage theft. The big question is whether repatriated workers will get their wages before they leave. It is difficult to file action against non-payment of wages. My view is that Governments in labour sending countries should intervene in such a case on behalf of the worker,” she said adding that there was also a directive at one point making it mandatory for Philippine workers to remit their money, a directive which drew opposition from workers.
Prof. Ray Jureidini, Professor of Migration Ethics and Human Rights, Hamad Bin Khalifa University (HBKU), Qatar, said: “Call it wage theft or wage fraud, this should be criminalized. However employers will be opposed to the use of these terms. It’s not only delayed payments or non-payment of dues but also delays in payment of overtime and other incentives.”
He said wage theft is the same as stealing from the employer’s wallet. COVID has affected businesses of many and resulted in wage cuts. Some businesses are using the pandemic to refrain from paying their workers who are non-nationals. There have been wage cuts as much as 40 per cent and in some cases contracts were amended to reduce wages. Wage cuts only for non-nationals are discriminatory, however in the Gulf that discrimination has existed for a long time, he added.
Prof. Francois Crepeau, Professor, Faculty of Law, McGill University, Canada, said that one of the problems for migrant workers who have problems is that there is an imbalance of power between the employer and the worker. “The precarity of status of the worker is that they fear they would be sent back if they create problems. They have reasons to fear because they have loans (taken to get foreign employment) to pay, families to look after. Most workers who are in a precarious situation move on with their lives despite the problems as they fear deportation if they raise their voice in protest,” he said.