Thursday, 21 February 2019

​HOW DOES THE PROPOSED NEW MINIMUM WAGE BILL AFFECT YOU & ME?

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So in the past few months, there has been a lot of back and forth between the National Labour Congress (NLC) and the Federal Government (FG) on the issue of increment in the national minimum wage. The NLC at first proposed an increase to N65,000 which would have been a quantum leap from the meager N 18,000 paid as minimum wage.

After a nationwide strike that affected the nation and crippled the public sector; and much negotiations, the NLC and the FG came to an agreement of a new minimum wage of N30,000.

Despite promises made by President Buhari, this increment is yet to take effect as the bill which would legalise the increment has not been passed into law nor has it even been forwarded to the National Assembly for passage as at today (22nd of January, 2019) by the President.

A lot of Nigerian workers especially those in the lowest cadre of employment like cleaners, messengers, receptionists, gardeners etc. are ecstatic over the proposed minimum wage because as it said in Nigerian parlance, “half bread is better than puff-puff” and the agreement between the Federal Government and the NLC gives them hope of a salary increment. The passage of the proposed bill would imply that the minimum salary that can be paid to the least qualified staff of an establishment is N30,000.

Many workers in the public and private sector are wondering as well how this bill when it is eventually passed will affect them and their take-home at the end of the month. Does this new minimum wage herald the beginning of the enforcement of the national minimum wage across both private and public sectors? Are the 10 staff of Emeka Echezona’s small laundry business, for instance, entitled to receive under this proposed bill, a minimum salary of N30,000?

Even for employers in private businesses, how feasible would it be for them to pay a salesgirl for instance, N30,000 as a monthly salary?  Would small business owners be able to sustain their businesses after making such payments to their staff for the month? Depending on their business can they even afford to pay it? Would such employers be forced to make these payments at the detriment of their businesses?

These are some of the speculations and concerns being raised by both business owners/employers and employees in the private sector especially small businesses.

Well it is only until the proposed bill is eventually passed to the National Assembly and its contents made open to the public, that we can properly assess how the proposed law will affect workers and employers both in the private and public sectors and the economy in general. However, since this proposed bill is going to be an amendment of the current National Minimum Wage Act, it’s wise to a look at some of its current provisions as these may well form the basis of the proposed bill.

The current National Minimum Wage Act defines a worker as an employee in public service or the civil service of the Federation or State or local government. This definition cuts out the private sector from the payment of minimum wage. Section 2 of the same Act provides that the national minimum wage shall not apply to establishments where less than 50 workers are employed; or where workers are paid based on commission; or where workers work in seasonal employment like farming and other agricultural activities or where they work on a part time in the establishment.

It’s obvious from the above stated current state of the National Minimum Wage Act that unless serious changes are captured in the new National Minimum Wage Act Amendment, junior employees in the private sector may never stand a chance to gain the benefit of receiving the newly proposed minimum wage of N30,000.

A comprehensive review of the bill will be published on our site when its contents are made public.

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