Drivers of Wage Underpayment: Gendered Experiences among Female Food and Beverage Workers in Malaysia

Abstract

Wage underpayment, where employers fail to pay workers their legally required wages, is a widespread problem affecting millions of workers globally and has crucial consequences for inequality and economic development. This study explores the factors contributing to underpayment experienced by employees at 'K' Mart in Johor, Malaysia. Data were collected using a qualitative approach, specifically a case study design, through semi-structured, in-depth interviews with five female employees in the food and beverage sector, providing comprehensive insights into their lived experiences of the issue under study. The findings show that underpayment was primarily caused by three factors, i.e., social and organizational factors, economic factors, and psychological factors. Social and organizational factors encompass four sub-themes, including gender wage gap, age-related biases, non-compliance with minimum wage policy, and wage theft. Additionally, economic factors comprise two key sub-themes, i.e., unpaid overtime and economic recessions and business conditions. Finally, psychological factors include two critical sub-themes, i.e., low self-confidence in salary negotiations and fear of being negatively labeled. The findings highlight the multifaceted nature of underpayment, revealing systemic issues related to weak enforcement mechanisms, employer exploitation, and worker vulnerability. This study offers practical recommendations for organizations to adopt transparent compensation strategies and proactive policies and contributes to the broader understanding of wage inequity's implications for employee well-being, organizational effectiveness, and labor market fairness in Malaysia.