Jun 26, 2023
Wage Theft: A Deep Dive into Sections 395 and 396 of the Penal Code
Wage theft, a relatively new term in Norwegian legal context, refers to the unjust enrichment of employers at the expense of the employee's salary. Wage theft was criminalized in 2021 as part of a package of measures aimed at combating labor crime, especially in industries where foreign workers are highly affected. This article will provide a detailed review of the criminal provisions against wage theft, highlighted through the Penal Code §§ 395 and 396.
§ 395. Wage Theft
Wage theft is defined in Penal Code § 395 as the situation where a party neglects their duty to provide salary, holiday pay, or other compensation to an employee. This unjust act must be committed with the intention of self-gain or to promote another's unjust gain.
This legislation covers both contractual and statutory wages, as well as certain other types of compensation in the employment relationship. The penalty for such an offense is a fine or imprisonment for up to 2 years.
§ 396. Gross Wage Theft
For more serious cases of wage theft, the Penal Code § 396 provides for a stricter penalty framework. Gross wage theft can result in a fine or imprisonment for up to 6 years.
When assessing whether the theft is gross, special consideration should be given to whether the offense has a significant value, whether it has a systematic or organized character, or whether it is particularly offensive or harmful to society.
The Purpose Behind Criminalizing Wage Theft
The criminalization of wage theft was seen as an important part of combating labor crime, as it constituted a significant problem in the Norwegian labor market. Wage theft often deprives particularly vulnerable workers of livelihood money, causing great harm to those affected.
Furthermore, it was seen as a major societal challenge that legitimate businesses risk being outcompeted by businesses that underpay. By placing the provision against wage theft in the Penal Code, rather than in the Working Environment Act, the legislator wanted to highlight the seriousness of wage theft.
The Description in § 395
The description in § 395 comprises three main elements:
Neglect of duty to provide salary, holiday pay, or other compensation: To fulfill this element, the employer must have failed to pay the salary, holiday pay, or other compensation to which the employee is entitled. It is important to note that both contractual and statutory compensation are covered by the law.
Unjust gain: The neglect must have been committed with the intention of self-gain or to promote another's unjust gain. This means that the employer must have intended to achieve an unjust economic advantage through the neglect.
Guilt: To be punished under § 395, the employer must have acted with intent. This means that the employer consciously neglected their duty, fully aware of the consequences of the action.
If all these elements are present, the employer can be punished for wage theft according to § 395. The penalty is fines or imprisonment for up to 2 years.
To classify a wage theft as gross (§ 396), it is required that the offense either has a significant value, is done in a systematic or organized manner, or is particularly offensive or harmful to society. This increases the penalty to up to 6 years.
Summary
In summary, it is of great importance for employees to be aware of their rights and ensure that they are fairly compensated for their work. If you as an employee are unsure whether you have been subjected to wage theft, you should ensure that you receive all payslips and check that you receive what you are entitled to according to law, regulation, and agreement.
If you experience that your employer does not pay or underpays salary and holiday pay, you have the right to petition the employer for bankruptcy and then apply to NAV Wage Guarantee to cover wages and expenses. Remember that there are limitations to which claims NAV Wage Guarantee covers, and the process requires that you first send a payment demand to the employer, followed by a bankruptcy notice, and finally a bankruptcy petition to the district court if your claims are still not met.
As lawyers with significant experience in employment law, we are here to support you through this process. We understand how complicated and overwhelming it can feel, and we are here to help you navigate this process. If you have questions or need assistance, do not hesitate to contact us. Remember, it is your right to be paid for the work you do, and we are here to help you ensure that this right is upheld.
