Truck System Wages
The Truck System of paying wages relates to the practice of paying workers in script, or tokens, which could only be used in designated places, such as stores operated by their employers. In some extreme cases, lawful money was never used; "store credit" would be given for purchases, with records kept by the store. No receipts for transactions were given. The "company store", with its high prices, became infamous in many places. This system was closely associated with small, isolated and/or rural communities, where uneducated workers did not have a wide choice of employment, and would quickly become indebted to their employers so they were unable to legally leave the system.
Accounts have maintained many employers would only allow their script to be used in particular places, such as stores owned by a member of their family, or only cashed at bars/pubs owned by their family. Of course, fees were deducted for changing the script, and the stores and pubs made excessive charges.
It was made illegal for miners (and other occupations) in the U.K. in 1831. It was a wide-spread system in the world in the 18th and 19th centuries, and still exists in some areas today.
According to the West Briton and Cornwall Advertiser newspaper, published in Truro, Cornwall in 1848, one person sued for wages owed. He had an ill child, but could not buy the medicine the doctor ordered, as the store did not happen to have it, and all he had to use for money was script, so he could not visit any shop in town. The child died, and he could not buy a stamp to send word to his family of what had occurred. His employer pointed out they had given him 5s. for a coffin, and allowed him the afternoon off so he could bury the child. The court held that the man had agreed to be paid in script by accepting the job offered, and he was not working as a miner since he operated dubbers in a china clay pit; therefore, the 1831 laws of England against the truck-system of paying wages to miners did not apply to his situation.
The terms "tommy shop" in the U.K., and "tienda de raya" have also been applied to this system of work/payment.
Truck systems increasingly came under criticism, and laws have been passed in many jurisdictions making it illegal for payment for work done to be made in anything but legal tender, or to specify where employees may spend their pay.