New Minimum Wage Act
On Thursday last week, April 18, the new National Minimum Wage [Amendment] Act came into force when President Muhammadu Buhari signed it into law. It raised the national minimum wage from the current N18,000 a month to N30,000. For the Nigeria Labour Congress [NLC] and its allies that championed the protracted fight to raise the […]
On Thursday last week, April 18, the new National Minimum Wage [Amendment] Act came into force when President Muhammadu Buhari signed it into law. It raised the national minimum wage from the current N18,000 a month to N30,000.
For the Nigeria Labour Congress [NLC] and its allies that championed the protracted fight to raise the minimum wage, it was a sweet if not entirely happy end. This is because the new minimum wage is well below the N50,000 that labour asked for two years ago. A presidential panel headed by former Head of the Civil Service Ms. Ama Pepple had last year recommended N30,000 as the new wage but state governors insisted they could not pay this amount. As a result of their resistance, the Council of State recommended N27,000 back in January this year.
On January 22, this year, the Presidency transmitted the bill to the National Assembly which provided for N27,000 as the national minimum wage. Both chambers of the National Assembly however raised the figure to N30,000. Both Senate and House passed the bill on March 19. The president finally assented to it last week. Every worker of federal, state and local governments must now earn N30,000 as minimum wage a month. Workers of any organization that are up to 25 in number must also earn this wage.
Senior Special Assistant to the President on National Assembly Matters (Senate), Senator Ita Enang, said implementation of the law is with immediate effect and it is for all workers across the federation except for organisations with less than 25 workers. He added, “This makes it compulsory for all employers of labour in Nigeria to pay to their workers N30,000. And this excludes persons who are employing less than 25 workers, persons who work in a ship which sails out of jurisdiction and other persons who are in other kinds of regulated employment which are accepted by the Act.
“It also gives the workers the right, if you are compelled by any circumstance to accept salary that is less than N30,000 to sue your employer to recover the balance and it authorises the Minister of Labour and any person nominated by the Minister of Labour, or any person designated by the Minister of Labour in any ministry, department or agency to on your behalf take action in your name against such employer to recover the balance of your wages. It also ensures and mandates National Salaries, Income and Wages Commission (NSIWC) and the Minister or Labour to be the chief and principal enforcers of the provisions of this law. And this law applies to all agencies, persons and bodies throughout the Federal Republic of Nigeria.”
We congratulate NLC and its president Abba Wabbah on this sweet victory. We however foresee some implementation problems. Usually, soon after a minimum wage law is passed, federal and state governments issue circulars that contain the adjustment in wages for different grade levels. This, more than the minimum wage itself, is what leads to hefty increases in their wage bills and the resultant complaints that they “cannot afford to pay” the new wage. Well, they can, provided they keep salary adjustments for other levels to a minimum.
We urge the federal government not to take away with the left hand what it gave with the right hand by hiking the VAT rate or other taxes. Governments should also not retrench workers in these harsh times because of the new minimum wage. It is also time to consider an adjustment in the national revenue sharing formula so that states and local governments can cope with the greater financial responsibilities that they now shoulder.