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Certain Workers Excluded from Nigeria’s New N70,000 Minimum Wage: Tripartite Committee Report
As anticipation builds around the implementation of Nigeria’s new N70,000 minimum wage, a recent report reveals that not all workers will benefit from this increase. The Tripartite Committee on the New National Minimum Wage has outlined specific categories of workers who will not be eligible for the new wage, based on criteria beyond the minimum wage threshold.
The committee, consisting of key stakeholders such as the Minister of State for Labour and Employment, Onyejeocha Nkiruka, Governor Mohammed Bago of Niger State, labor leaders, and private sector operators, recommended changes to the eligibility criteria for receiving the minimum wage. Their report highlights several categories of workers who may be exempt from the new wage law.
Key Recommendations and Criteria for Exemption
- Employer Size and Revenue:
- The committee recommends that employers with fewer than 10 employees (reduced from the previous 25 employees as per the 2018 Minimum Wage Act) may be exempt from paying the new minimum wage.
- Businesses with less than N50 million in revenue per quarter or N200 million annually are also eligible for exemption.
- Business Type and Age:
- Nano businesses (managed by 1-3 persons with capital below N50,000) and micro enterprises with 10 or fewer employees are considered for exemption.
- Startups and businesses in existence for not more than three years could be exempted to encourage entrepreneurship.
- Sector-specific Considerations:
- Industries where staff remuneration is regulated by other Acts of the National Assembly may qualify for exemption.
- The committee suggests introducing hourly, daily, and weekly wage options for businesses that pay wages outside the traditional monthly system. This measure is intended to accommodate part-time and piece-rate workers in both the organized and informal sectors.
- Exemption by Application:
- Organizations may apply for exemption based on financial constraints such as insolvency, debt crisis, or other financial difficulties that threaten their existence. However, this does not apply to government entities or their ministries, departments, and agencies.
Rationale for Exemptions
The committee aims to prevent unfair exclusion of workers from decent earnings while considering the financial realities of small businesses. The approach focuses on a business’s revenue and financial capacity rather than its employee count, ensuring that exemptions are justified by financial evidence rather than arbitrary limits.
Formal vs. Informal Sector Wage Patterns
The report also differentiates between formal and informal wage patterns:
Informal Sector: Features varied wage patterns, such as commissions or daily sales-dependent pay. This sector also includes apprenticeships and other non-traditional employment arrangements.
Formal Sector: Includes government and organized private sector businesses where monthly salaries are prevalent. These sectors are typically the focus of national minimum wage laws.