The National Minimum Wage Act 2019 (the “2019 Act”) has increased the minimum wage in Nigeria from 18,000 Naira (45 Euros) to 30,000 Naira (75 Euros) per month.
By Efunsola Moore, Mary Ekemezie and Ozofu Ogiemudia, Udo Udoma & Belo-Osagie
Similar to its predecessor (the repealed National Minimum Wage Act, Cap. N6, LFN, 2004 (as amended) (the “Former Act”)), the 2019 Act applies across the all sectors/employers, with the exception of:
- an establishment in which workers are employed or paid on part-time and/or on a commission or piece-rate basis;
- workers in seasonal employment like agriculture; and
- persons employed on a vessel or aircraft to which the laws regulating merchant shipping or civil aviation apply.
Unlike the Former Act, which applied to employers that employed 50 or more people, the 2019 Act applies to employers who employ 25 or more persons.
The key developments that employers should be aware of are:
- the changes to the definition of “part-time work”. The 2019 Act defines “part-time work” as “work of a duration shorter than those for comparable full-time work in a sector or occupation”. Under the Former Act, “part-time work” was defined as “work of a duration of not less than forty-hours a week”. This new definition indicates that the normal working hours for establishments will now be subject to sectoral practices and the occupation of employees;
- the introduction of a five-year term period, after which the national minimum wage expires and will be reviewed in accordance with the provisions of the 2019 Act; and
- the establishment of a Tripartite Committee on National Minimum Wage (the “Tripartite Committee”) to review the minimum wage. The Tripartite Committee comprises representatives of the government, labour and the private sector.
The 2019 Act prescribes stiffer penalties for employers who contravene its provisions. These penalties include; fines (not exceeding 5% of the monthly wage); payment of all outstanding arrears to any “underpaid” employee; and financial penalties. In light of the consequences that employers in Nigeria may face if they are held to be in breach of the new minimum wage requirements, employers should assess the wages paid to their staff, to ensure they are compliant.
© 2019 Udo Udoma & Belo-Osagie
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