Legal Definitions - lay system

The lay system is a method of compensation primarily used in maritime industries, especially for fishing vessels. Under this system, the crew of a vessel does not receive a fixed salary or hourly wage. Instead, their earnings are directly tied to the success of their voyage or expedition.

Here’s how it typically works:

• The vessel's catch or harvest (e.g., fish, crabs, lobsters) is sold, either through a contract or at auction.
• From the total revenue generated by this sale, all operational expenses for the trip are deducted. These costs can include fuel, bait, ice, food, port fees, and necessary repairs.
• After expenses, a predetermined share or compensation is allocated to the vessel owner for the use, maintenance, and depreciation of the boat.
• The remaining amount, which represents the net profit, is then divided among the captain and each crew member. This distribution is based on pre-agreed percentages, often reflecting their specific roles, experience, and responsibilities on board.

This system incentivizes the crew to work efficiently and maximize the catch, as their individual earnings directly depend on the overall profitability of the venture.

Examples:

• Deep-Sea Tuna Fishing: Imagine a large commercial tuna fishing boat, the Ocean Drifter, embarking on a month-long expedition in the Pacific. Upon returning to port, their significant haul of tuna is sold to a large seafood cannery. From the total revenue generated by this sale, the operating costs for the trip—such as fuel, bait, ice, and provisions—are deducted. Additionally, a predetermined percentage is allocated to the owner of the Ocean Drifter for the use and maintenance of the vessel. The remaining sum, the net profit, is then divided among the captain and each crew member based on their individual agreed-upon "lay" percentages, reflecting their roles and experience. This illustrates the lay system because the crew's pay is a share of the net profit after sales, costs, and owner's compensation.

• Alaskan Crab Fishing: Consider an Alaskan crab fishing vessel, the Sea King, during a challenging crabbing season. The crew spends several weeks setting and retrieving traps, accumulating a substantial quantity of live crabs. Once back at port, the entire haul is sold to a seafood processor. From the total revenue, expenses like fuel, food for the crew, gear repair, and a portion for the boat's depreciation are subtracted. The boat owner then takes their agreed share for the vessel. The rest is then divided among the deckhands, engineer, and captain according to their pre-negotiated "lay" percentages. This demonstrates the lay system as the crew's income is a percentage of the profits left after all operational costs and the owner's share are accounted for from the sale of the catch.