What you need to know about the new Minimum Wage.

minimum wage is the lowest remuneration that employers can legally pay their workers. Equivalently, it is the price floor below which workers may not sell their labor.

On 10th September 2018, the Ministry of Labor and Social Security announced the that the minimum wage(s) had been increased, with immediate effect. This announcement was met with excitement, uproar and confusion, depending on which side of the grass you stand.

What does it all mean?

To begin with, the minimum wages that can be LEGALLY paid to workers (barring a few exemptions) has increased.

  Domestic Workers General & Shop Workers
Previous Min. Wage K522.40 K1,132.00
New Min. Wage K993.60 K1,698.60

Please note that these include transport and housing allowances.

DOWNLOAD SUMMARY OF THE REVISED MINIMUM WAGES 2018

Different sides of the Spectrum

In line with the ILO Convention 131 for fixing minimum wages, the minimum wage was reached in agreement and consultation with the representative organisations of employers and workers concerned. In Zambia, one of the biggest employers’ organisation is the Zambia Federation of Employers (ZFE) and that of workers is the Zambia Congress of Trade Unions (ZCTU). However, to this day even after signing off on the wage there is still no consensus on the new wage.

Against (ish)

ZFE argue that the percentage of the increase is too drastic, given the country’s current economic standing and unemployment rates, they state that an increase of 21% would have been more practical. They have likened the experience to killing the proverbial ‘golden goose’, the employer. Harrington Chibanda, ZFE Executive Director, has cited that the ILO convention 131 states that ‘numerous economic factors including the requirements of economic development, levels of productivity and the desirability of attaining and maintaining a high level of employment need to be taken into consideration before the minimum wage can be changed’. “Our economy for the past 4 years has been growing by 3.8% annually, how do we then justify the increase of wages by 50% and 100% in some areas,” Mr, Chibanda questions, “it’s unrealistic,” he states. ZFE have also argued that whilst the major argument for the increase has been that the cost of living is going up, so has the cost of doing business and this will further drive that cost up.

Workers productivity has also been called into question throughout this entire saga, ‘why should we pay more for the same, sometimes low output?’One could argue that workers should increase their own wages by growing in their job roles and being more productive.

Numerous stakeholders have also argued that it is not the sole responsibility of the employer to maintain or sustain the employee’s food basket, but the governments as well.

Furthermore, we can definitely expect costs of certain goods and services to go up and the new minimum wages will cushion the formally employed but this begs the question, what about the informally employed and unemployed?

For

The food basket for a family of 6 in Zambia is currently purported to stand at K5,200.00. An employee getting K522.4 cannot be expected to meet this in any way, shape or form. ZCTU have used this as the basis of their argument, also citing the ILO convention 131 which states that the elements to be taken into consideration in determining the level of minimum wages shall, include the needs of workers and their families, taking into account the general level of wages in the country, the cost of living, social security benefits, and the relative living standards of other social groups.’ Furthermore, the minimum wage was last reviewed in 2012 and it is not living wage.

The Labour Commissioner, Chanda Kaziya, stated “to employ someone, domestic or otherwise is not compulsory, but to pay them is.” He further stated that “employers in any capacity are in a privileged position to set terms and conditions for the employment agreement”, thus productivity expectations should be set in line with remuneration requirements.

Pros & Cons

Minimum Wage Pro's & Cons

What else do the Amended Statutory Instruments (SI) bring to the Table?

 

1. Paternity Leave

Previously, paternity leave was neither recognized or acknowledged in Zambian Employment Law. However, the Statutory Instrument No.71 (Shop Workers) Order, 2018 allows for paternity leave of five continuous working days (with the General Order allowing for 15 days) for employees who have served the employer for a continuous period of not less than twelve months, immediately preceding the date of commencement of paternity leave. While this is applauded it is a bit surprising as maternity leave is only granted after twenty-four months. Furthermore, the SI does not state paid paternity leave thus, whilst employees are entitled to the leave, it allegedly doesn’t have to be paid.

2. Sick Spouse, Children and Dependent

Previously, the law provided for female employees to take a leave of absence to enable her to nurse her hospitalized sick child, this has now changed to an “employer shall, where an employee has a sick spouse, child, or dependent, grant that employee leave of absence for a period not exceeding fifteen working days in any period of 12 months.” It is no longer sex specific and has extended to spouses and dependents.

3. Funeral Assistance

Previously, funeral assistance encompassed a standard coffin, a funeral grant of K350, 50 kilograms of mealie-meal, and transport to and from the cemetery or its monetary equivalent, for the death of an employee’s spouse and registered children. This has now changed to a standard coffin and funeral assistance of K1,500.

4. Transport Allowance

This has changed from K102.40 to K153.60 a month.

5. Lunch Allowance

This has changed from K120 to K180 a month.

Download full Amended Statutory Instruments 

The Minimum Wages and Conditions of Employment (Shop Workers) (Amendment) Order, 2018

The Minimum Wages and Conditions of Employment (General) (Amendment) Order, 2018

The Minimum Wages and Conditions of Employment (Domestic Workers) (Amendment) Order, 2018

 FAQs

  1. What facilities has the Ministry put in place to ensure compliance?

Abrogation of legislation is an offence thus everyone ought to comply. The ministry is carrying out numerous sensitization programs which include but are not limited to Radio and TV communication as well as compliance visitations. However, the biggest source of compliance will need to come from employees reporting non-compliant employers.

  1. How soon do employers have to comply?

The new wages are effective 10th September, 2018. However, employers who are unable to immediately comply can communicate this to their employees and agree on the date of implementation as well as a payment plan for any unpaid dues according to the new wages.

  1. Do the new wages apply to employees who are Unionized and have a Collective Agreement in place?

No, the orders do not apply to employees whose wages and conditions of employment are regulated through the process of collective bargaining under the Industrial and Labor Relations Act.