As the rollout of Nigeria’s new N70,000 minimum wage approaches, not all workers will benefit from the increase. A recent report from the Tripartite Committee on the New National Minimum Wage reveals significant exemptions that will impact various categories of workers and employers.
According to the committee’s findings, the new minimum wage will not apply to every worker. The sub-committee, which included members from the Ministry of Labour, the National Salaries Incomes and Wages Commission, and various labor and private sector representatives, recommended changes that will determine who is excluded from the wage increase. Notably, businesses with fewer than 10 employees and those with annual revenues below N200 million are among the exempted categories.
The committee’s approach to exemptions reflects a shift from the previous 2018 Minimum Wage Act, which set the threshold at 25 employees. Instead, the new criteria focus on revenue and net income, aiming to prevent unfair exclusion of workers while also addressing concerns about businesses’ capacity to comply.
Exemptions will apply to nano businesses—those managed by 1-3 people with capital below N50,000—micro enterprises, startups, and companies with less than N50 million in quarterly revenue. The criteria also include businesses operating for less than three years and those governed by other regulatory Acts.
The decision to implement revenue-based exemptions rather than a blanket employee count is intended to provide a more nuanced approach, considering the financial capacity of businesses. However, this new model also introduces flexibility, allowing organizations to apply for exemptions based on evidence of financial distress or operational challenges.
The committee’s report underscores the complex nature of wage regulation, particularly in sectors where wages are not standardized. For example, informal sector workers, who are often paid on a commission or piece-rate basis, will not be covered by the new wage laws. Similarly, workers in seasonal or maritime jobs are excluded.
While the new regulations aim to strike a balance between fair compensation and business viability, critics argue that the exemptions could undermine the goal of providing a living wage for all workers. The International Labour Organisation has expressed concerns about such exclusions, deeming them potentially unjust for the lowest earners.
The implementation of these guidelines will require careful monitoring to ensure that the minimum wage laws are fairly applied and that exemptions are justified. As the new wage structure rolls out, both workers and employers will need to navigate these changes and address any emerging challenges.
