ENUGU, Nigeria (VOICE OF NAIJA)- Former Minister of Works, Babatunde Fashola, has called for a reasonable adjustments to the minimum wage to help Nigerian workers cope with the rising cost of living.
He argued that the current exemption of small businesses with less than 25 employees from paying the minimum wage raises doubts about the effectiveness of the law.
The former minister stated this in a piece titled, ‘Minimum Wage Review – My Take Away’.
Fashola also pointed out that the National Assembly may have acted unconstitutionally by legislating a monthly salary instead of an hourly wage.
He urged experts to seek help from global faculties to design a formula for reviewing salaries and wages to address cost-of-living challenges and promote national productivity and prosperity.
“When cost of living rises as they have now, the lowest and the highest income earners are impacted to varying degrees and therefore deserving of reasonable adjustments whether they earn wages or salaries.
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“An establishment employing less than 25 persons…raises serious doubts about whether we have enacted a minimum wage Act if small businesses who barely have 25 employees but who employ the largest number of the most vulnerable people are exempted from the law as currently legislated. Who then is the law protecting?
“Therefore, it seems obvious from this definition that by making a law in Section 3(1) of the Minimum Wage Act that the minimum wage of N30,000 shall be paid monthly, the NASS may have acted unconstitutionally by legislating on a SALARY (monthly payment) when they only have power to legislate on WAGES, an hourly payment.
“Of course, if and when we decide as a country on the implementation of a proper minimum wage, we must then design a formula to review salaries of those who do not earn wages in order to assist them deal with cost-of-living challenges.
“This may yet be the most fruitful outcome of the dilemma of appropriate employee compensation as it may lay the foundation for national productivity, wealth creation and prosperity. The opportunity is too big to miss or waste.”
“As we do this, we must be mindful of the need for a possible amendment to item 34 of the Exclusive list in the constitution to include salaries because it currently does not.”
Fashola’s comments come amid ongoing negotiations between the government and labour unions over a new minimum wage.
The labour unions have demanded a significant increase in the minimum wage, citing the current economic realities and inflationary pressures.
The government has offered a lower amount, which labour has rejected. The negotiations are ongoing, with the President promising to send an executive bill to the National Assembly soon.
On Friday, June 7, 2024, the two sides (labour and the government) failed to reach an agreement. While labour dropped again its demand from ₦494,000 to ₦250,000, the government added ₦2,000 to its initial ₦60,000 and offered workers ₦62,000.