Although most workers are excited for the N70,000 new minimum wage to start any day now, not all workers will receive the higher pay.
Who is underpaid, and why do they fall below the minimum wage threshold?
The investigation states that “the committee, after careful considerations, consultation and survey, including reports of the public hearings, as well as to provide solution to issues and concerns raised, noted that this sub-committee tried to take a different approach to determining who should be exempted in order to avoid unreasonable or unfair exclusion of many poor workers from the right to a decent earning.”
The committee determined that in order for a business to be exempt from paying the minimum wage, it had to meet certain requirements. These included being a startup, having 10 or fewer employees, being a nano business (managed by 1-3 people with capital below N50,000), and having a commission contract.
Others include businesses that make less than N50 million in revenue per quarter or N200 million annually, organizations with fewer than ten employees, businesses that have been in operation for no more than three years, industries whose employee pay and benefits are governed by other Acts of the National Assembly, and any other business that the Minister of Labor and Employment or the Executive Chairman of the National Salaries, Incomes and Wages Commission finds to be reasonably justified in being waived or exempted. However, such a waiver will not be granted unless the basis for its application is evidence of lower revenue, insolvency, debt crisis, or other justification that endangers the establishment’s ability to continue operating.
The committee noted the exemptions for seasonal workers in agricultural farmlands and for anyone operating a vessel or aircraft subject to rules governing civil aviation or commerce shipping before coming to its recommendations.
The formal sector wage structure, which includes corporations, governments, and other organized private sector businesses, was also noticed by the committee. This group primarily pays salaries on a monthly basis. The national minimum wage rules frequently target workers in this category as well as their employers. Even for this group of companies, there remains a significant obstacle in terms of covering or adhering to the federal minimum wage, where applicable. Consequently, it is challenging to make a precise evaluation of the pattern because some establishment members deliberately skirt the threshold or, in the case of state governments, disobey the law.
It made note of “the multidimensional wage pattern in the informal sector, where workers lack a standard by which to measure their success.” In this area, there are two types of compensation and remuneration: commission and piece-rate. Certain people receive their daily salary after company shut, which may vary based on their day sales. Certain individuals serve as apprentices, gaining experience and knowledge while contributing to the establishment or expansion of the firm. In exchange, they agree to be compensated with a stake in the business, become partners, or receive settlements after a predetermined number of years.
