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States Bound By Law To Pay N30,000 Minimum Wage – FG

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The federal government has declared that the payment of the N30,000 new minimum wage by the 36 states of the federation is non-negotiable.

Citing the passage of the N30,000 National Minimum Wage Act which came into effect on April 18, 2019, the government said that the states were bound by the law to pay their workers the new salary.

According to the government, state governments and private sector employers who by May end fail to pay the new salary are already in deficit.

In an interaction with journalists in his office in Abuja, the minister of Labour and Employment, Dr. Chris Ngige, said that arriving at the new minimum wage was a tortuous and excruciating journey. He described it as an achievement for the President Muhammadu Buhari administration.

On fears that some state governors may not pay the new wage, Ngige said that the national minimum wage is now a law and no governor can say he would not pay.

He said: “The issue of national minimum wage is item 34 on the exclusive legislative list of the third schedule of the Nigerian Constitution. The issue of labour is also there and not on the concurrent list. If it is on the concurrent list, then they can make their own state Assembly laws on that. Every state government is now owing workers if they have not started paying the N30,000. They are owing their workers effective from 18th of April, the take-off date of the new minimum wage.”

Ngige said that consequential adjustment on how the new wage would affect other cadres of the workforce, is being discussed as a committee had been set up to design a new salary template.

He explained that “we are now in a committee working out a new template with which we will adjust upward the consequential adjustment for those already earning above N30,000. The minimum wage is for the most vulnerable down the ladder and that is the man on grade level one step one. So, you must consequentially adjust for the man on grade level two, grade level three, grade level four and five, because that man on GL 1 step 1 has overtaken them with his new pay. That is what we refer to as consequential adjustment. This consequential adjustment touches more the people on the lower ladder and we are working it out.”

The minister said that some employers in the private sector adjusted immediately because it was easier for them to do so, noting that in the public sector, the bureaucracy and bottlenecks of government is responsible for the delay.

He said” “You know that you must budget for it. That is what is causing the delay. But whenever the encumbrances are removed, they will pay arrears with effect from 18th April, 2019. So, the sooner establishments start paying, the better for them so that they don’t take a huge backlog that they cannot take. If you pay in piecemeal and start going on, the better; so, I advise all employers of labour in Nigeria, including state governments to immediately set up their Joint Negotiating Councils so that whatever we get from here, we give it to them and they will look at it based on their peculiarities.”

Ngige urged state governments to be careful not to make the same mistakes they made after the N18,000 minimum wage bill was passed.

According to him, “in 2011, there was a mistake in the consequential adjustment in some states when they applied the principle of percentage increase across board and they ran into trouble and were unable to pay. What this N30,000 translates into is that there is a 67 per cent salary increase. If a state government applies the same 67 per cent increase across board, there will be serious trouble. The same goes for the federal government and when there is trouble; there will be trade dispute because the principle of ability to pay will come in.”

While explaining some of the intricacies during the minimum wage discussion, Ngige said that when the Buhari administration came on board, about 27 states were unable to pay the existing minimum wage of N18,000.

He said that though there was revenue shortfall, the government was committed to a salary increment for workers because it was a genuine demand.

“And there was a demand, a genuine demand necessitated by the increase in the pump price of petrol or Premium Motor Spirit (PMS) and the fact that inflation has eaten deep into the N18,000 and also by the fact that there was a big depreciation of the dollar, even though we were not computing everything about wages with the dollar,” he said.

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